Start-up and growing businesses require adequate financial resources to survive and achieve sustainable growth. Empirical evidence indicates that a significant proportion of business failures result from inadequate financing alongside operational and managerial challenges. This study investigates the effectiveness of capital structure on the growth and start-up of businesses, focusing specifically on the roles of equity capital, debt capital, and retained earnings. A desk review methodology was adopted, synthesizing relevant theoretical and empirical literature. The study draws on the Pecking Order Theory, which emphasizes the superior impact of internal financing on financial performance, favoring equity and retained earnings over debt. The Modigliani–Miller Capital Structure Theory provides a conceptual benchmark, though its relevance is limited to perfect market conditions. Agency Theory highlights the influence of corporate governance and managerial decision-making on capital structure choices, while Trade-off Theory underscores the cost-effectiveness of equity and retained earnings relative to debt. Empirical evidence indicates that equity financing significantly enhances financial performance, and retained earnings support firm growth when effectively reinvested. In contrast, debt financing generally has an insignificant or negative impact on start-up and growing businesses. The study concludes that low-cost, internally generated financing is most effective in promoting sustainable growth and recommends that start-up businesses prioritize equity mobilization through personal savings and family contributions while strategically limiting external borrowing and reinvesting retained earnings.