International Journal of Entrepreneurial Venturing (13 papers in press)
Better safe than sorry? The effect of trust on venture capitalists
by Carolin Plagmann, Eva Lutz
Abstract: This study investigates the impact of trust among nations on the formation of multinational venture capital syndicates. The data set is based on ThomsonONE and comprises 859 realised triads among lead venture capitalists, their syndicate partners, and portfolio firms. We find that bilateral trust has a significant positive impact on the probability of cooperation in a syndicate. The magnitude of this relationship depends on the status of venture capital markets. The relevance of bilateral trust to the probability of cooperation increases for investments in large venture capital markets with high deal numbers. In line with previous findings on venture capitalists' constricted scrutiny in boom phases, we find that trust becomes less relevant for cooperation during upswings of deal activity in the target market. Consistent with research that finds access to capital as one major reason for syndication, recent capital abundance in the syndicate partner's market reduces the impact of bilateral trust on the probability of cooperation.
Keywords: trust; venture capital; syndication; inter-firm alliances; relationship formation; partner selection; internationalisation; venture capital markets.
Environmental orientation among nascent and established entrepreneurs: An empirical analysis of differences and their causes
by Jacob Hörisch, Jana Kollat, Steven A. Brieger
Abstract: This paper investigates differences between nascent and established
entrepreneurs with regard to their ventures environmental orientation. Based
on quantitative data of more than 10,000 entrepreneurs, analyses of variance
(ANOVA) are conducted. The results show that the average environmental
orientation is significantly higher among nascent than among established
entrepreneurs. Variables are identified which influence the magnitude of these
differences, as they exert different effects on environmental orientation among
nascent and established entrepreneurs, such as household income or media
reports. Based on the findings, implications for policymakers, entrepreneurs as
well as for entrepreneurship education are drawn to use the potential of nascent
environmental entrepreneurs more comprehensively. For instance, teaching
institutions need to give realistic impressions of the challenges and potentials of
environmental entrepreneurship. Similarly, environmental entrepreneurs should
think about the specific challenges connected with environmentally-oriented
ventures, such as potential trade-offs between environmental and economic
objectives, at early stages of their entrepreneurial activity.This paper investigates differences between nascent and established entrepreneurs with regard to their ventures
Keywords: Environmental entrepreneurship; environmental orientation; Global Entrepreneurship Monitor; nascent entrepreneurship; established entrepreneurship; trade-offs; entrepreneur; sustainability; firm-age.
How does context influence entrepreneurship education outcomes? Empirical evidence from Bangladesh and Germany
by Petra Dickel, Linda Kleemann, Tarun Kanti Bose
Abstract: This study uses quasi-experimental data from 245 students in Bangladesh and Germany to explore the effect of entrepreneurship education on entrepreneurial attitudes (perceived desirability and perceived feasibility) and entrepreneurial intentions. The study specifically focuses on how context factors influence entrepreneurship education outcomes. Difference-in-differences analysis with propensity score matching is used to control for selection bias. The results show that the perceived entrepreneurship environment significantly affects the impact of entrepreneurship education and that the strength and direction of effects differ between the two countries. The implications of these results for entrepreneurship research, educators and policy makers are discussed accordingly.
Keywords: entrepreneurship education; contingency approach; quasi-experimental design; self-selection bias.
Which factors determine the gender gap in the entrepreneurial action? Evidence from Mexico
by José Manuel Saiz-Álvarez, Lucía Rodríguez-Aceves
Abstract: The empirical evidence about how the gender gap influences on the entrepreneurial intention and its effects on the entrepreneurial action are still limited. The objective of this paper is to analyse the main factors to explain the entrepreneurial gender gap in Mexico related to entrepreneurial intention and entrepreneurial action and moderated by income, education, and marital status. Our findings show that, first, although women have a high entrepreneurial intention in Mexico, they are reluctant to create firms due to a high perceived behavioural control, so their entrepreneurship action is deficient. As a result, the Mexican labour market continues being very traditional with low rates of female participation Second, the entrepreneurial intention tends to decrease with income. Third, single men with completed graduate and/or postgraduate studies and high levels of income are more prone for entrepreneurship in Mexico.
Keywords: gender gap; entrepreneurial action; entrepreneurial intention; GEM; Mexico; women entrepreneurship; education; marital status; income; perceived behavioural control.
Beyond the finance paradigm: the entrepreneurial logic of financial resource acquisition from an effectuation perspective
by Christopher Weigand
Abstract: This study examines the logic that entrepreneurs follow when acquiring and mobilising financial resources in the early stages of firm development. By adapting effectuation theory to the demand side of entrepreneurial finance, this study proposes an effectual logic of financial resource acquisition as a theoretical counterpart to the causal financial resource logic associated with the neoclassical finance paradigm. Effectuation provides a behavioural explanation for differences in capital acquisition and financial pecking-orders under the assumption of boundedly rational entrepreneurs. This study develops a conceptual framework which relates the application of an effectual or causal financial resource logic to specific boundary conditions, thereby strengthening the theoretical links between entrepreneurship and entrepreneurial finance. As this study goes beyond what is known from traditional corporate finance, it helps to align theoretical predictions with entrepreneurial practice and provides entrepreneurs with guidance on how to finance entrepreneurial opportunities in situations of uncertainty, risk or resource scarcity.
Keywords: entrepreneurial finance; financial decision-making; new venture financing; financial resource logic; start-up financing; capital structure decisions; pecking-order hypothesis; effectuation; capital acquisition.
RADICALLY RETHINKING THE WAY CROWDFUNDING WORKS: THE CASE OF JUMPSTARTFUND AND THE HYPERLOOP
by Nikolaus Lipusch, Dominik Dellermann, Ulrich Bretschneider, Philipp Ebel, Jan Marco Leimeister
Abstract: In this research, we explore the unique case of JumpStartFund, a new crowdfunding platform that is used to develop the Hyperloop project. To this end, we employ an in-depth single case study to examine the participation architecture of the platform as well as the Hyperloop campaign content, based on which we derive a new crowdfunding model. The derived crowdfunding model differs from existing crowdfunding models in that it allows entrepreneurs to develop their business with the crowdmore actively. Our research has important implications for research and practice. First, we introduce a new crowdfunding model that expands the boundaries of existent models. Second, we explain how our model helps to more efficiently leverage the potential inherent in the crowd thereby redefining entrepreneurial success within crowdfunding. Third, we discuss how our findings contribute to existent research within the context of crowdsourcing.
Keywords: crowdfunding; case study; crowdfunding models; co-creation.
Specialization and Syndication as Risk Management Strategies for Venture Capital Firms in India
by Kshitija Joshi
Abstract: This paper presents an analysis of syndication and domain specialisation strategies pursued by the venture capital (VC) firms in India. Using the theoretical lens of the resource-based view, we explore how three main resource-related attributes: resource structure of the VC firms, resource requirements of the investee ventures and the ease of access to resources, drive the intensities of syndication and specialisation for the VC firms under study. We use the K-means cluster analysis technique, to analyse and profile four distinct VC firm segments: a) low syndication and low specialisation; b) high syndication and low specialisation; c) low syndication and high specialisation; d) high syndication and high specialisation. Our study contributes to the extant literature on VC investment strategies, top management teams and fills an important gap on the literature pertaining to VC firms in India.
Keywords: Venture Capital; Syndication; Specialization; India; Social Capital; Human Capital; Top Management Teams.
Bound for Glory or Cursed for Life? Exploring the Impact of Initial Resources on the Venture Emergence of New Technology-based Firms
by Ferran Giones, Francesc Miralles
Abstract: The value of existent firm's resources in uncertain and dynamic contexts is unclear. It is difficult to determine whether starting a new firm with a strong resource position will give an advantage in technology-intense contexts. We propose a revision of the role of resources in new tech-based ventures. We adopt a mixed-method approach. We use the cases of 21 new technology firms to build propositions on what factors (resources) play a role in new venture emergence. We then test to what extent those resources make an effect on the new venture emergence using a longitudinal dataset of 400 new technology-based firms. The results show that not all resources matter equally in the early-stages of a new technology-based firm. We identify that specific combinations of entrepreneurial experience and industry knowledge has a positive impact, while other resources such as technology assets, surprisingly, do not generate a clear impact.
Keywords: Technology Entrepreneurship; Venture Emergence; Technology Resources; Panel Data Set.
Dont throw in the towel too early! How agency conflicts affect the survival of Corporate Venture Capital units
by Daniel Fischer, Deniz Philipp Kruse, Hannes Leonardy, Christiana Weber
Abstract: We empirically investigate the largely unexplored relationship between corporate top management teams (TMT) and CVC unit managers. Doing so, we provide new insights into the interplay between TMT decisions and CVC managers' behaviour and how agency conflicts between them influence the survival of CVC units. Using a proprietary dataset of 64 CVC units we apply fsQCA in order to identify the interrelatedness, causal asymmetry and equifinality of agency-related conditions leading to survival. We relativise former literature by demonstrating that financial incentivisation of CVC managers need to be complemented by additional factors to impact the survival of CVC units. Further, we conclude that the decision-making autonomy of CVC managers seem to work as a form of non-financial incentive. Finally, we demonstrate that the configuration of providing strategic support, investing with high strategic proximity, and non-autonomously acting CVC managers is related to non-survival of the CVC unit.
Keywords: Corporate Venture Capital; CVC; Survival; Agency Theory; Configuration; Qualitative Comparative Analysis; QCA.
Determinants of Early-Stage Technology Venture Valuation by Business Angels and Venture Capitalists
by Christoph P. Wessendorf, Orestis Terzidis, Jens Kegelmann
Abstract: The valuation of early-stage ventures represents a difficult and often subjective process and is characterised by risk and uncertainty. This can be further stressed for technology-driven ventures, having substantial technological risks. We therefore approached existing research on the determinants of early-stage technology venture valuation in a structured way through means of a systematic literature review (SLR). Whereas general valuation determinants strongly focus on personality and experience of the founders as well as market potential, technology venture valuation is strongly influenced by the existence and quality of alliances with corporations and investors as well as patents. We consider these determinants as crucial in technology venture valuation to ensure market access, to signal a strong belief in the technology and to provide proof of a high degree of innovation, thereby noticeably reducing technology-specific complexity and uncertainty.
Keywords: start-up; NTBF; technology venture; valuation; valuation determinants; venture capital; business angel; entrepreneurial finance; systematic literature review; SLR.
Entrepreneurship Education and the Intention to Start a Business: The Moderating Role of Cognitive Biases
by Oliver Thomas, Torsten Wulf
Abstract: Entrepreneurship education has been introduced and promoted at many universities throughout the world with the aim of fostering economic growth and employment. However, research has shown only weak effects of entrepreneurship education programs on participants' intentions to start a business, which has given rise to a debate about the effectiveness of such programs. Accordingly, researchers have called for consideration of variables that might moderate this relationship. This study attempts to fill this gap by examining the effect of three cognitive biases as possible moderators of the relationship between entrepreneurship education and entrepreneurial intentions: overoptimism, overconfidence, and the planning fallacy. The results indicate that overoptimism and the planning fallacy moderate the effects of entrepreneurship education. The study also shows that entrepreneurship education has a significant, positive impact on entrepreneurial intentions. Our results have implications for entrepreneurship education scholars, university managers, and developers of entrepreneurship programs.
Keywords: entrepreneurship; education; entrepreneurial intentions; cognitive biases; cognition; overoptimism; overconfidence; planning fallacy; venture creation; venture formation.
Corporate Entrepreneurship in SMEs, an Evaluation of Venture Level Success Factors
by Kent Thoren
Abstract: This article refines the knowledge about what causes corporate ventures to succeed or fail. The research model includes 13 different success factors from previous research and assesses their individual and collective impact on venture outcome. By encompassing most of the prevalent factors in relevant literature the risk of getting misleading influence coefficients, due to omitted independent variables, is mitigated. Structural equation modelling with survey data from 274 ventures gave results that imply that several of the proposed success factors actually have no effect on venture outcome. On the other hand, there are also some factors that have a significant impact on success, in particular market uncertainty, previous venture experience, resource availability, style of management, and opportunity size. The internal order of importance among the factors, however, depends on which measure of venture outcome that is used.
Keywords: Corporate entrepreneurship; intrapreneurship; corporate venture; strategy; growth; SME; small firm; success factors.
Creative Industries Integrated Clustering to Foster Innovation (Case at Bandungs Creative Industries)
by Christina Wirawan, Leo Aldianto, Grisna Anggadwita, Vania Nur Rizqi
Abstract: Creative industry captures new economy dynamics based on creativity, skill and talent. Creative industries grow fast and contribute more to national economic development. In order to sustain contributions to economic development, creative industries need to innovate productively. One way to encourage innovation is to foster co-creation by strengthening the effectiveness of creative industries relationships with stakeholders, such as community, consumers, suppliers and other creative industries, as well as to generate information and knowledge to support them. An integrated cluster will support industry efficiency; better facilities; infrastructure; amenities; services; as well as better protection of the environment and social relationships. Placing creative industries in an integrated cluster will provide better collaboration opportunity that will support co-creation that will trigger innovation. This paper will provide a conceptual framework of integrated symbiosis creative industries clustering to foster their innovation toward sustainability and high-performance using the value co-creation platform concept.
Keywords: ccluster; creative industry; innovation; sustainability; value co-creation platform.