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This article focuses on the lack of capital available to small, private, family-owned businesses or businesses in which the manager and his or her family hold more than 51% of the total number of shares. It claims that being listed might be the best way to overcome this lack of capital. The article starts from the established view that access to financial resources is not easy for small family-owned businesses (Coleman & Carsky, 1999; De Visscher, Aronoff, & Ward 1995; Harvey & Evans 1995). In questioning the generally admitted frontier between investment and financing policies (Modigliani & Miller, 1958, 1963), this empirical work is on the fringe of standard financial theory. The study is carried out on two samples of small French family firms. The first is composed of 46 private companies, the second of 49 listed companies. All companies are SMEs (small and medium-size enterprises) and are nearly the same size. Empirical results are based on two cross-sectional analyses (1992, 1993). Linear regressions between investment and financial constraints are presented for the two samples separately. Results are very different, depending on whether the firm is listed. The description of private firms' investment is consistent with the pecking order theory (Myers & Majluf, 1984) and financial constraints clearly appear. The description of listed family firms is more classical: investment and financing policies seem to be independent. Finally, quoted family-owned businesses do not seem to suffer from lack of capital.
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