Using survey responses for 117 private Irish software product firms, this study compares the capital structure and financing decisions of academic spinoffs, industry spinoffs and nonspinoffs. It finds very little difference between the capital structure of industry spinoffs and non-spinoffs NTBFs. Academic spinoffs, in contrast, are much more dependent on external equity than their NTBF counterparts, and much less dependent on internal sources, including the founders' savings and retained earnings. Academic spinoffs appear to be unique amongst firms in that the standard financing 'pecking order' is completely turned on its head: external equity dominates their capital structure, followed by internal sources of funds, and debt as a last resort. This heavy reliance on equity may, in part, reflect the impact of lifecycle factors on capital structure - the vast majority of the academic spinoffs were in the commercialisation stage of their development, and at this stage software firms generally have the same external equity-internal-debt capital structure. However, at 71% of total financing, the equity component (comprising venture capital and equity from private investors) in academic spinoffs at the commercialisation stage is much higher than the sample average of 56.5%. The dominance of external equity in capital structure appears to be a persistent feature of academic spinoffs. © 2008 Emerald Group Publishing Limited.