Purpose- In this paper we discuss an exploratory study that involved face to face, qualitative inter-views with 20 technology-based small firms (TBSFs) and seven qualitative interviews with key in-formants and funders. The TBSFs were all located in New Zealand (NZ), a small open economy with a limited domestic market, a population of 4.3 million, current GDP per capita of US32,260(2010)andarguablyanimmatureandlimitedfinancialinfrastructure.ThecentralresearchquestionforthisstudywaswhetherTBSFscanraiseappropriatefinancethatallowsthemtostart,developandremaininNZ?Design/methodology/approach−Anexploratorystudyhasinvolvedaprogrammeof20in−depth,facetofacequalitativeinterviewswiththefoundersandchiefexecutivesofTBSFsdrawnfromthreecontrastinglocationsinNewZealandandfromacrossdifferenttechnology−basedsectors.Afurtherseveninterviewshavebeenconductedwithkeyinformantsdrawnfromthethreelocations.Findings−Asmightbeexpectedfromtheory,therewasaheavyrelianceoninternalfundingandbootstrappingmethods,althoughanumberofTBSFshadinadditionmanagedtoraiseadditionalprivatecapitalthroughtheirowncontactsandnetworks.Allthesamplehadrelieduponinternalfund−ingtosomeextent.However,atotalof13(65percent)eitherreliedtotallyoninternalfunding(fromtheinitialstart−up)orrelieduponacombinationofinternalfunding,bootstrappingandprivateinves−tors.ContextwasimportantwithNewZealandbeingasmallopenandrelativelyremoteeconomywhencomparedtotheUK;wheretheEUprovidesasignificantmarketforTBSFdevelopment.Incontrast,NZTBSFs,ofnecessitywereheavilyinvolvedindistantoverseasmarkets.ResearchImplications−TherewasevidenceofadistinctfinancegapintheexternalequitymarketinNewZealand.ForamountsbelowNZ1m, these could be sought from networks of business angels, even though such sources were limited and restricted. If the funding sought was in the range NZ1m−5m; this was likely to fall between the informal and formal venture markets. Associated with this was a distinct preference for relying on internal funding by NZ TBSFs.
Originality/value- This paper provides a contribution by being the first serious study of TBSF devel-opment in New Zealand, specifically focusing on the role of finance. The example of TBSF develop-ment in New Zealand’s small, open economy is significant and comparisons are drawn with the extent of funding gaps and similar issues in TBSF development from a UK based study. These comparisons enable the findings to be set in context and implications developed