From whom should ICT startups raise capital? The effect of ownership structure on efficiency in new ICT startups

A company's ownership structure is an important factor in company performance and is vital for technology-based startups that often find it difficult to accumulate the necessary capital. Using spectral clustering, this study divides information and communication technology (ICT) startups into six groups (CEO-centered, employee-centered, family-owned, CEO-only, employee, and outsider groups) according to ownership structure. Then, this study estimates each group's technical efficiency using stochastic frontier analysis and compares technical efficiencies using meta-frontier analysis. In addition, this study conducts tobit regression to determine the statistical significance of the technology gap ratio. The results show that companies were most efficient when they were financed by CEOs and their families or relatives, and the second most efficient were companies financed by funds of CEOs and external investors. This results provide suggestions regarding how ICT startups should raise the necessary funds for future business operations.