Founder's Knowledge Research Articles

Founder's Financial Knowledge and the New Firm's Ability to Obtain Debt Financing

AbstractHow does a founder's knowledge of debt financing influence his/her new firm's ability to obtain the amount of debt financing it desires? Building on the cognitive psychology literature, we propose that the depth of a founder's debt financing knowledge is positively associated with the new firm's ability to obtain debt financing as he/she will be better at selecting and acquiring relevant sources of debt financing. Integrating insights on entrepreneurial growth‐oriented strategies, we further argue that this relationship will be more pronounced when the new firm internationalizes and innovates more. Using a Heckman full information maximum likelihood model, we analyse survey data on 1845 Flemish new firms. The first stage of the model estimates the new firm's probability of raising debt financing. The second stage tests the relationship between the founder's knowledge depth of debt financing and the new firm's debt financing ability, conditional on the decision to raise debt financing. We find that the founder's knowledge depth of debt financing is positively associated with the new firm's ability to obtain debt financing. This association becomes even more pronounced when the new firm internationalizes more. These findings extend the entrepreneurial finance, entrepreneurial strategy and cognitive psychology literature.

STUDI EKSPLORASI BIAS ORIENTATION DAN COGNITIVE KNOWLEDGE DALAM SUKSESI USAHA RM. SIMPANG RAYA PADANG

The variety of businesses that exist, including family businesses, makes these businesses have to determine strategies to be able to survive. Among the strategies that must be done is to strive for succession to run from the first generation to the next generation. Business succession is carried out aiming to reorganize business governance so as to achieve a balanced state. The purpose of this study was to analyze the orientation and cognitive knowledge of founders and successors in managing business succession at Simpang Restaurant. This study uses descriptive qualitative methods with data analysis data processing techniques. The results show that the succession that was carried out initially went well, but in recent years there have been obstacles related to differences in orientation and cognitive knowledge between current founders and successors. The difference in purpose and knowledge orientation about the restaurant business between the two managers is very different. So that the current successor is uncertain and needs to learn many things related to the ins and outs and internal and external management of the restaurant.

The effects of opportunities and founder experience on new firm performance

Much prior research in entrepreneurship has focused on the role of the founder's knowledge in affecting new firm performance. Yet, little is known about how and why the entrepreneurial opportunity itself shapes outcomes in this arena. We begin filling in this critical gap in the literature by examining how the riskiness of the opportunity not only affects start-up performance, but also conditions the relevance of the founder's distinct knowledge endowments. Analyses of a sample of 451 new firms show that the riskier the opportunity, the greater the performance of the start-up, above and beyond founder characteristics. Moreover, the value of founder knowledge is relative to the type of opportunity exploited: high-risk opportunities favor founders with managerial experience, whereas low-risk opportunities favor founders with industry experience. Copyright © 2014 John Wiley & Sons, Ltd.

Diving in Before Testing the Waters: Founder Knowledge and Venture-Organizing Priorities

Although business creation has become increasingly central to management theory, the process mechanisms by which individuals start businesses and resolve preliminary doubts about their endeavors re...

Exploring the Role of National Culture on Knowledge Practices: A Comparison between Spain and the UK

In the context of a competitive knowledge-based economy, the knowledge provided by a firm's founders is one of the most important measures of success. This paper aims to identify the role of national culture on a founder's knowledge practices in a modern organisation. Using data collected from 258 Small to Medium sized Enterprises (SME(S)) in the Spanish and UK telecommunication industries (130 from Spain and 128 from the UK), we propose three knowledge management practices to be analysed; namely transfer, transformation and open-mindedness. This paper provides evidence that while Spanish SME(S) are more positively associated with higher levels of transfer and transformation of knowledge, UK SME(S) are more positively associated with higher levels of open-mindedness. Hence, this study serves as an important contribution to the small amount of literature currently available in this field by examining different practices that can be explained by the cultural characteristics of both countries.

How Entrepreneurs' Knowledge and Network Ties Relate to the Number of Employees in New SMEs

Knowledge is central to entrepreneurship when explaining successful venturing. However, little is known about how a founder's knowledge and their network ties relate to the number of workers in early‐stage small and medium‐sized enterprises (SMEs). This study draws on the knowledge‐based view and social network theory to examine 174 new SME founders. Findings suggest a positive relationship between the comprehensiveness of an entrepreneur's knowledge set and the number of workers. In addition, the number of network ties positively moderates the relationship between the entrepreneur's knowledge set and the number of employees. Network tie knowledge heterogeneity was not significantly related to the number of employees in new SMEs.

Congenital learning in the Spanish telecommunication industry

Knowledge provided by a firm's founder(s) is one of the most important success factors for SMEs. This paper aims to identify the impact of the founder's knowledge on business performance in today's organization. It is with this in mind that we propose a specialized organizational learning process, which we refer to as the congenital learning process, by which the firm transforms the tacit and explicit knowledge of the founder into knowledge which is available to the firm and its members. The research model and hypothesized relationships are empirically tested using the structural equation modeling (SEM) approach, validated by factor analysis of 130 SMEs in the Spanish telecommunications sector. Two structural equation models, derived from the literature, have been used, resulting in the conclusion that organizational performance is positively affected by the transfer and transformation of knowledge as long as the organization has implemented processes that lead to the creation of what we refer to as an open organizational context.