This study provides a comprehensive analysis of distribution channel choices of new entrepreneurial ventures (NEVs). First, factors that influence NEVs' choice of distribution channels are examined. Second, performance consequences of those choices are investigated. A research model drawing from transaction cost economics as well as customer relationship and strategy literature is developed. Data collected from 330 NEVs are used to test the proposed model. The results show that the identified antecedents explain a large part of the variance in NEVs' channel choice. Moreover, NEVs that accomplish a fit between their distribution channel system and transaction cost-, product-, strategy-, and competition-related variables tend to perform better. Findings are discussed in light of the specific characteristics of NEVs.