The contribution of board experience to opportunity development in high-tech ventures

Abstract

This study investigates the board of directors’ contribution to opportunity development in high-tech ventures. Based on the dynamic managerial capabilities perspective, we argue that more experienced boards will contribute more to opportunity development. Furthermore, building on the attention-based view, we argue that this effect will be moderated by structural and situational factors that affect board members’ attention to the venture’s opportunity development process. Using hand-collected data on 179 high-tech ventures in Belgium, we find that board experience has a stronger relationship with the board’s contribution to opportunity development when board size decreases, when board tenure increases and when the venture underperforms. These findings offer a contribution to the literature on opportunity development in new ventures and to research on the boards of directors’ role in new ventures. They also have important implications for entrepreneurs who are trying to develop opportunities and their stakeholders. Plain English summary While experienced board members have the potential to contribute to opportunity development in high-tech ventures, they often refrain from leveraging this experience due to the structure of the board and the situation of the venture. When high-tech ventures try to develop new opportunities, they mostly rely on the experience of the top management team. As this could limit the range of opportunities they see, bringing in experienced board members may seem a fruitful way of getting new information and a broader perspective. This study indeed shows that, in the context of high-tech ventures, more experienced boards can contribute more to opportunity development. However, even if board members have relevant experience, they are not always motivated to use this experience to the benefit of the venture. In fact, they are less likely to leverage their experience when boards are bigger in size, when board members have spent less time sitting together on the board, and when the venture performs better. The implication of this study is that high-tech ventures should be aware that board members can potentially contribute to opportunity development, but that their actual contribution depends on structural and situational factors that direct board members’ attention to opportunity development.