Founder Characteristics Research Articles

Do the Characteristics of Startup Founders Matter for Funding Performance?

Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect the SFP. Background Problems: While academia and industry emphasize the importance of startup funding performance (SFP), the empirical evidence on its determinant has received less attention. Yet, upper echelons theory addresses the importance of a leader's characteristics in increasing the organization's performance. Therefore, the current study focuses on investigating the role of startup founders' characteristics in the SFP. Novelty: The current study proposes the founder's characteristics as the key factor for startup funding. Unlike previous studies, this study utilized a survey design to answer the research question. Additionally, this study is the pioneer for entrepreneurial finance studies in gauging the upper-echelons framework. Research Methods: This research collected information from 228 Indonesian Startups through a survey. The estimation model is estimated using robust cross-sectional OLS regression and logistic regression. For robustness purposes, this study tackles the endogeneity issue by using two-stage least squares (TSLS) and PLS-SEM. Finding/Results: The regression results (including the two-stage least square approach) reveal that education and gender play a significant role in SFP but not experience. Moreover, it shows that higher education would increase a startup's probability of having better funding. Meanwhile, male entrepreneurs have lower funding performance than women entrepreneurs. Conclusion: Our study surmises that the education of the founders is crucial for startup financing in Indonesia. It also shows that the experience of founders has a trivial effect. It supports the upper echelons theory, emphasizing the pivotal role of founders' characteristics in entrepreneurial finance. Policy-wise, focusing on education can enhance startup success while addressing gender disparities is crucial. However, limitations exist, suggesting the need for longitudinal studies and broader sample sizes. Future research could explore managerial abilities and cultural factors, offering fresh insights into the literature.

Characteristics of the leaders of social and environmental enterprises in Latin America and the relationship with the success of their businesses

ObjetivoO estudo procura conhecer as características da liderança dos fundadores das empresas sociais e ambientais na América Latina que alcançaram o sucesso desde uma abordagem sustentável apesar do contexto social, econômico, político e sanitário difícil no qual vivem.Desenho/metodologia/abordagemNa pesquisa não experimental de tipo de estudo qualitativo, descritivo e exploratório, se realizaram 21 entrevistas detalhadas a empreendedores socio/ambientais da Kunan Rede (organização que agrupa o ecossistema empreendedor no Peru).RecomendaçõesO estudo analisa o perfil de liderança e as características dos empreendedores que criaram negócios rentáveis com uma abordagem socioambiental que resolvem problemas sociais relevantes e contribuem ao melhoramento da qualidade de vida das pessoas e ao cuidado do meio ambiente.Limitações/implicações da pesquisaO estudo só incluiu 21 líderes empreendedores com destacada participação e um impacto socioambiental positivo. Não obstante, é importante mencionar que aqueles líderes têm o reconhecimento e apoio da Kunan Rede.Originalidade/valorO estudo contribui para a conceptualização e compreensão do perfil dos líderes de empresas sociais e ambientais e cujos desafios principais são resolver problemas sociais e/ou ambientais da sociedade e ajudar ao melhoramento da qualidade de vida das pessoas e do meio ambiente. Conhecer o perfil desses empreendedores pode gerar valor ao conhecimento do tema e ajudar ao seu entendimento e propor estratégias para aprimorar o ecossistema do empreendedorismo socioambiental em países emergentes como Peru, assim pode contribuir ao relacionamento e parcerias com diversos atores sociais do setor público, privado, terceiro setor, academias, entre outros, para a gestão e promoção de negócios sustentáveis.

Identifying critical resources for successful fashion startups in the USA: an exploratory study

PurposeUsing resource-based theory and social cognitive theory, this study aimed to investigate crucial resources that new US fashion ventures need to survive the initial stage of business development. It also intended to discover the role and characteristics of founders that contribute to the success of a fashion business, as well as challenges and struggles that fashion entrepreneurs face.Design/methodology/approachFor the study, a qualitative research method with in-depth personal interviews was conducted. Participants were recruited through purposeful sampling methods. Using a grounded theory approach, we analyzed the approximately 308 pages of primary source data, transcribed from the records of the interviews.FindingsFindings were categorized into three major themes. First, financial resources and literacy, marketing, merchandising, as well as legal resources were identified as critical resources at the firm level. Second, at the individual level, four important human agency factors, including intentionality, forethought, reactiveness and reflectiveness were revealed as essential for the success of fashion entrepreneurs. Lastly, relationships and networks were highlighted at both firm and individual levels.Originality/valueThis study contributes to the understanding of fashion entrepreneurship, an understudied area. The study identified critical resources for the success of fashion startups, especially during the initial business development process. The findings also emphasized the importance of human agency factors and networks at both firm and individual levels.

Founder's characteristics, institutions, and entrepreneurial firm's time to IPO in China

Founder's characteristics, institutions, and entrepreneurial firm's time to IPO in China

Unraveling Interconnections: Analyzing the Impact of a Founder’s Characteristics on Business Growth Strategy

This study examines the influence of founder characteristics on the selection of business growth strategies in companies undergoing an initial public offering (IPO). The research is based upon quantitative analysis of data from entrepreneur-led IPOs on the London Stock Exchange. The study investigates the impact of founder’s work experience, external directorships, education, age, ownership, and the presence of a founder–CEO, on the choice between mergers and acquisitions (M&A) and research and development (R&D) as growth strategies. The results show that founders with a throughput functional background and extensive external directorships are more likely to adopt M&A as a growth strategy. Moreover, founders with higher education levels and a PhD are more inclined towards R&D investment. The findings also suggest that older founders are more likely to invest in R&D, whilst higher levels of ownership tends to deter R&D expenditure. Interestingly, the presence of a founder–CEO is associated with a lower likelihood of investing in R&D and a higher propensity for M&A, although these correlations are not statistically significant. These results shed light on the influence of founder characteristics on strategic decision-making during the IPO stage and provide implications for understanding the dynamics of business growth strategies in transitioning companies.

Mentors Selecting Mentees: The Effects of Founder Characteristics and Startup Mentor Motivations

Mentors Selecting Mentees: The Effects of Founder Characteristics and Startup Mentor Motivations

How do innovative internet tech startups attract venture capital financing?

Abstract This research uses signaling theory to combine the perspective of investment results with existing venture capital (VC) standards and reexamines the factors that influence the attractiveness of innovative internet tech startups to VC from the perspective of equal opportunity startups. Taking the financing status of 310 startups in China's sharing economy as an example and using regression analysis, we empirically test the influence of entrepreneur and firm characteristics on attracting VC. Our results show that among founder characteristics, the entrepreneur's entrepreneurial experience alone is insufficient to attract VC. Industrial experience and political background have a positive influence on attracting VC. Among firm characteristics, market-entry order and business group (BG) affiliation positively influence attracting VC. This is a new and relevant discovery. In the Chinese market, investors are more inclined to provide financial support to entrepreneurs or startups that have already gained legitimacy from the government or business groups.

Innovation Climate and Attraction and Retention of Human Capital Among Small and Medium Enterprises in Kenya: The Moderating Effect of Founder Characteristics

Past studies on the effect of innovation climate on the attraction and retention of human capital produce mixed results. For this reason, this study aimed to investigate the impact of founder characteristics on the correlation between innovation climate and the attraction and retention of human capital. Criterion sampling was used to select the top 100 SMEs in Kenya. Targeted respondents included founders of SMEs. Out of the targeted 100 SMEs, 59 responded, giving a response rate of 59%. The study used a structured questionnaire to collect data and the partial least squares structural equation modelling technique to analyze the collected data. Since previous researchers have found mixed results on the influence of innovation climate on the attraction and retention of human capital, the current study aimed to ascertain this and thus the moderating variable, founder characteristics. It established that the variable had an insignificant effect on the link between innovation climate and human capital attraction and retention (βeta = 0.230, t = 1.855, p = 0.064). Since talented employees usually desire to work in a conducive workplace environment, SMEs need to create a supportive innovation climate that can assist in attracting, maintaining and retaining human capital. Future scholars can investigate the influence of other moderating variables on the link between innovation climate and the attraction and retention of human capital.

Analysing the Antecedents of Entrepreneurial Bootstrapping and Bricolage: A Modified Total Interpretive Structural Modelling and MICMAC Approach

This article seeks to systematically identify and model antecedents of entrepreneurial bootstrapping and bricolage to determine and interpret the relationships and hierarchy between them. Entrepreneurial bootstrapping and bricolage are key dynamic capabilities that help entrepreneurs access, accumulate and enhance resources to adapt to scarce business environments. The article employs a modified total interpretive structural modelling analysis to determine hierarchical inter-relationships between the antecedents and a Matrice d’ Impacts Croises Multiplication Applique An Classment analysis to understand their driving and dependence powers. The results highlight that founder characteristics and human capital are placed at the lower levels, making them critical driving elements of the model along with environmental hostility and resource constraints. Entrepreneurial orientation, slack, external financial capital and entrepreneurial frugality are dependent variables, with social capital as a linkage variable. This study will guide entrepreneurs trying to implement resourcefulness behaviours to respond to the coronavirus disease-2019 crisis by prioritising driving antecedents to impact the dependent factors further.

Who are the founders of venture capital‐backed initial public offering companies in the United States?

AbstractPrior research acknowledged the importance of founders in affecting firm strategy and performance, but large empirical analyses of profiles of entrepreneurial founders are scant, in part because of the difficulty in collecting founder data. This study represents the first effort to study entrepreneurial founders across half a century. Using a hand‐collected unique and comprehensive dataset, this research sheds light on the demographic, educational, and career characteristics of founders for the venture capital (VC)‐backed initial public offering (IPO) companies during 1960–2015. The research has useful implications for researchers and practitioners. By understanding who the founders are and where they come from, this article scratches the surface of founder characteristics and firm performance from which further work could build on and provides useful information for founders who are likely to seek VC‐funding and IPO to build realistic expectations, VC firms who are interested in investing in potentially rewarding and promising new ventures to select good targets, and governments that struggle to promote entrepreneurial efforts and enhance economic development, in general, to come up with appropriate policies.

The Influence of Personal Characteristics of Founders of Failed and Prospered Generational Transition Family Businesses in Anambra State

Family businesses which are often adjudged very risky ventures as a result of rapid decision makings are quite different from other enterprises, as they contribute immensely in wealth creation, economic development, sustainability, employment and job opportunities, improved Gross Domestic Product, prospect from younger generations, as well as mentorship from experienced business leaders. However, despite their numerous contributions, they are often bedeviled by numerous challenges which often lead to their failures at the exit or death of their founders. This paper identified the rate of family businesses that have suffered generational transition failures in Anambra state, and also examined the differences in personal characteristics of founders of both failed and prospered Generational Transition (GT) family businesses in the state. The application of Taro Yamane formula gave a sample size of 327, a total of 327 questionnaires was therefore administered to Directors and Managers of Family businesses in the three main cities of Anambra state. The results of the study revealed that 72 percent of the family businesses fail after generational transition. Also, the analysis based on the mean of the individual questionnaire items, with the acceptance benchmark of 3 revealed that there are significant differences in the personal characteristics of the founders of the failed and successful generational transition family businesses. The regression analysis validated the results as indicated by the correlation coefficient (R = .868). It could also be observed from the coefficient of determination (R-Square = .792) that 79 percent differences exist in the relationship between the personal characteristics of founders of the failed and prospered GT family businesses in the state. The paper concluded that founders and Directors of FBs should adopt positive personal characteristics, in order to mitigate the high failure rates of family businesses.

Make me act rapidly: identity perspective to the dynamics of start-up creation process

Purpose High-tech start-up creation is associated with complex challenges originating from quick transformations in technologies and markets. To raise start-up survival and success chances, founders need to ensure a rapid conversion of a venture idea into a working business. This paper aims to explore how identity-related characteristics of founders influence the speed of the start-up creation process. Design/methodology/approach For this study, a longitudinal multiple-case-study design was selected to identify a vivid flow of decisions and actions taken by high-tech start-ups for analysis in depth. Over 20 months, a series of interviews were organized with founders of six start-ups located in the same business incubator in Russia. Also, a set of additional data sources was engaged, including publicly available data and internal documents provided by businesses. Findings The findings reveal contrasting dynamics of start-up creation processes among founders with differing role identities. Identity fit and identity misfit are suggested to be serious pull and push factors in the process of organizational becoming through the impact they have on the situational regulatory focus of founders. Originality/value The current research contributes to the entrepreneurship stream of research by extending the knowledge of how cognition affects the process of new venture creation.

The Influence of Personal Characteristics of Founders of Failed and Prospered Generational Transition Family Businesses in Anambra State

The Influence of Personal Characteristics of Founders of Failed and Prospered Generational Transition Family Businesses in Anambra State

The Influence of Top Management Team Human Capital on Sustainable Business Growth.

Traditionally, enterprises have subscribed to the belief that top management team (TMT) human capital is of great influence to a specific entity. While long being a question of interest in the field of management, the extant literature rarely discusses the impact of TMT human capital on sustainable business growth. By examining data obtained from 535 TMT members of private enterprises in Zhejiang Province PRC, and investigate the mediating effect of decision-making quality as well as the moderating effect of founder characteristics, we analyze the positive operating mechanisms of TMT human capital on sustainable business growth. Interestingly, the single most striking observation to emerge from the empirical investigation was: (1) TMT human capital has a significant positive impact on sustainable business growth; (2) decision-making quality fully mediates the relationship between TMT human capital and sustainable business growth; and (3) the more open-minded the founders, the stronger the mediating effect of decision-making quality in the relationship between TMT human capital and sustainable business growth. This research has expanded the perspective and scope of the research on TMT human capital, and its practical usage is discussed.

Cash holdings in start-ups: The role of founder sociodemographic characteristics

In this study, we examine the determinants of excess cash holdings on start-ups paying particular attention to the role of the sociodemographic and educational characteristics of the founder. Using a mandatory database that combines firm-level financial data with the founder’s data, we find that founder characteristics provide predictive power in explaining excess cash holdings. Male founders who are older and foreign tend to hold more cash. Additionally, we find that start-ups with greater investment opportunities hold less cash. As expected, excess cash holdings decrease with size and availability of liquid-asset substitutes, and leverage – particularly short-term debt –increases the need for cash. Results are robust to mixed methods (Ordinary Least Squares and Fuzzy-set Qualitative Comparative Analysis) and reflect asymmetric configurations related to the demographic and educational characteristics of the founder.

Are Founders More Socially Responsible? -An Empirical Research on Private Listed Companies in China.

Personal factors such as the founder's values and psychological characteristics will influence founder's vision, his perception and interpretation of the decision-making environment, and his strategic choice and decision-making. Based on the theory of entrepreneurial characteristics, combined with the founder's unique psychological characteristics, this paper takes Chinese private listed companies between 2010 and 2018 as a research sample to study the effect of the founder of private enterprises on corporate social responsibility. Furthermore, this study analyzes the impact of different management roles of the founder on corporate social responsibility. We demonstrate that the private enterprises have better social responsibility performance when there are founders; the founders have different management roles, and their corporate social responsibility performance has certain differences, and the higher the management level of the founders, the better the corporate social responsibility performance. This paper studies the issue of corporate social responsibility from the perspective of the characteristics of founders, which expands the current framework of corporate social responsibility research and provides an empirical basis for founders to effectively participate in corporate management in practice.

The Processes Behind Pivots: Behavioral Perspectives on Entrepreneurial Change and Adaptation

Strategic change and adaptation play critical roles in young ventures’ success as they can result in better competitive strategies, or even a strategic pivot for the focal firm - i.e., a change in its products, markets, technologies, or business models that leads to a strategic reorientation. A limited but growing body of research in entrepreneurship focuses on new venture adaptation and has explored the antecedents of strategic adaptation as explained by industry structures, characteristics of firm founders and updating of their beliefs and mental models. However, surprisingly few studies explore whether firm founding characteristics or vision and passion, impact subsequent strategic choices, or how information screening and processing lead to entrepreneurial change and pivoting. Using a behavioral lens to examine entrepreneurial adaptation, the studies presented in our symposium explore the processes behind strategic pivots and how founder as well as firm founding characteristics interplay with decision-maker's mental models and information screening lead to entrepreneurial change and adaptation. Pioneering Digital MultiSided Platforms:Founding Characteristics, Key Strategic Choices and Survival Presenter: Audra Wormald; Robert H. Smith School of Business, U. of Maryland Presenter: Rajshree Agarwal; U. of Maryland Presenter: Serguey Braguinsky; U. of Maryland Presenter: Sonali Shah; U. of Illinois at Urbana-Champaign How do Women-led Entrepreneurial Firms Manage Change? Pivoting Among Female Entrepreneurs Presenter: Chiara Spina; INSEAD Presenter: Arianna Mastrippolito; Boston Consulting Group Not All Those Who Wander Are Lost: The Interplay of Mental models and Strategic Action Over Time Presenter: Douglas Hannah; Boston U. Questrom School of Business Presenter: Andrea Caldwell Marquez; U. of Texas At San Antonio Presenter: Timothy Ott; U. of North Carolina, Chapel Hill Living Your Passion and Embracing Change? The Impact of Mental Models on Entrepreneurial Adaptation Presenter: Anshuman Sinha; U. of California, Irvine How Do Entrepreneurs Learn Effective Resource Mobilization Actions Presenter: Benjamin L. Hallen; U. of Washington, Seattle Presenter: Suresh B Kotha; U. of Washington, Seattle Presenter: Alex Michael Murray; U. of Oregon

Successful startups: do their entrepreneurs share a common characteristic?

It is challenging to define what makes a startup successful and which factors determine the success of a startup. In this paper, we define successful startup those that survived at least three years and made at least one sale during that period. Looking to discuss which of the founders’ characteristics explain the success of a startup, we assessed the characteristics of the key individuals who run startups in Brazil to validate their profiles as entrepreneurs according to SEBRAE (2018). The survey and this study evidenced interesting characteristics of founders of Brazilian startups and one common characteristic among successful startups founders: successful founders are less worried than nonsuccessful founders to get other stakeholders’ support. This study identifies important research questions to be developed. Keywords: Entrepreneur profile, startup, success, entrepreneurship

Performance of FinTechs: Are founder characteristics important?

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How founder characteristics imprint ventures’ internationalization processes: The role of international experience and cognitive beliefs

While ample research has demonstrated that venture founders’ international experience affects their decision to internationalize, it is unclear how this experience affects the actual internationalization process of ventures that move abroad. We use a multiple case study approach to collect data on founders’ international experiences and cognitive beliefs about internationalization, the strategic decisions taken with respect to the internationalization process of their venture, and the relationship between them. We identify four types of international entrepreneurs that differ with respect to their international experiences and beliefs, and show how these differences affect the strategic decisions taken in the actual internationalization process.