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@article{198123,
        author = {Astha Chandak and Kashish Udhwani and Simar Kaur Gill and Bhawana Balmiki},
        title = {Relationship Between Debt-to-Equity Ratios and Startup Survivability in Pune's Incubation Centers},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {12},
        number = {11},
        pages = {8364-8376},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=198123},
        abstract = {Context: The capital structure of a firm determined largely by the mix of debt and equity plays a critical role in financial decision-making and long-term sustainability. The debt-to-equity ratio (D/E) is a core financial leverage indicator widely used in corporate finance to assess risk and financing strategy. Research shows that the capital mix impacts firm performance and survival outcomes, especially in early-stage ventures where access to finance is limited and risky. Understanding this balance becomes particularly important for startups operating within incubation ecosystems.
Objective/Need: Startups frequently rely on a blend of debt and equity to finance growth. While debt can support expansion, excessive leverage exposes firms to financial distress. Existing research evidences that certain debt structures increase survivability and revenue growth for entrepreneurial firms, whereas others may hinder long-term prospects. Given the gaps in literature on how D/E ratios influence survival specifically in incubation settings, this study aims to fill a contextual research void for Pune’s startup ecosystem, which is a key node in India’s broader technology and entrepreneurship landscape.
Methodology Used: This study adopts a quantitative research design with a panel dataset of startups admitted into major incubation centers in Pune over five years. Financial records will be analyzed to compute debt-to-equity ratios and survival outcomes (e.g., continued operations, exits, closures). Logistic regression and survival analysis (Cox proportional hazards model) will be used to gauge the statistical relationship between D/E ratios and startup survival probabilities, controlling for industry, age, funding type, and revenue growth. Secondary data sources include published financial statements and incubation records.
Major Findings: Existing empirical evidence suggests that startups using business debt taken in the firm’s name are significantly more likely to survive and grow compared with all-equity startups, while personal debt does not confer these benefits. The survival advantage is particularly pronounced for firms with balanced leverage, showing that optimal capital structure decisions can enhance long-term resilience in entrepreneurial contexts.},
        keywords = {Debt-to-Equity Ratio, Startup Survivability, Capital Structure, Leverage, Financial Risk.},
        month = {April},
        }