New ventures often require debt financing but face difficulties convincing lenders of their
creditworthiness because of agency problems. Researchers have shown that social capital can
help small firms reduce lenders' agency concerns but new ventures do not yet have their own
social capital. We propose that family involvement increases a venture's ability to borrow
family social capital for the purpose of obtaining debt financing. Empirical tests with 1267 new
ventures suggest that family involvement directly and indirectly improves a new venture's
access to debt financing.