Why Do Some Entrepreneurs Develop Venture Portfolios? And how do they Do So? A Meso-Level Analysis

Abstract

The question how decisions made by entrepreneurs affect their individual business ventures is essential to research in entrepreneurship. While knowledge on the role of entrepreneurial learning and habits (Aldrich and Yang 2014), the influence of uncertainty on organizing entrepreneurial activities (Alvarez and Barney 2005) and the role of past career practices on entrepreneurial decision making (Engel, van Burg, Kleijn and Khapova 2017) is widely established, yet little is known on how this applies to entrepreneurs “simultaneously owning and engaging in a portfolio of entrepreneurial interests” (Carter and Ram 2003, p. 374). As such, portfolio entrepreneurs are a distinctive group of habitual entrepreneurs whom received increased and sustained scholarly attention over the recent years (Wiklund and Shepherd 2003 and 2008, Baert, Meuleman, Debruyne and Wright 2016, Lechner, Kirschenhofer and Dowling 2016, and Cruz and Justo 2017). However, yet little empirical evidence exists to explain variation within this group of entrepreneurs (Kutzewski, Bahlmann and Stam 2020); nor do we know how and through which practices the formation of business portfolios is affected. We conducted research asking why, how and with what effect, portfolio entrepreneurs engage in their activities. To answer these questions, a comparative multi-case study design was chosen. The research unit comprised management decisions made by individual portfolio entrepreneurs. Based on a case sample comprising the explorative and exploitative activities of 21 portfolio-entrepreneurs with a combined portfolio of 129 companies, this research found ample evidence that various forms of intention (Why?), decision making and coordination (How?) exist simultaneously within the same portfolio (With what effect?). The result of this research contributes to our understanding of how entrepreneurial principles through which portfolio-entrepreneurs organize their activities affect the structure of venture portfolios.