Stages Of Venture Development Research Articles

Does team entrepreneurial passion matter for relationship conflict and team performance? On the importance of fit between passion focus and venture development stage

This study advances the literature on entrepreneurial passion, which struggles to explain when and how the experience of passion impacts venture-level performance, by shifting the focus to the team level and investigating the mechanisms and contingencies underlying this relationship. Drawing on identity control theory and the literature on new venture life cycle stages, we theorize and test that team entrepreneurial passion (TEP) affects new venture team performance via relationship conflict, and that this mechanism differs depending on whether the team’s passion focus is aligned with the venture’s development stage. Based on survey data and start-up competition scores from 86 new venture teams, we conclude that a prerequisite for a team to benefit from the experience of TEP, is that its passion focus at least reflects the entrepreneurial activities that are required for the specific development stage the venture operates in. Implications for research and practice are discussed.

Comparing effectuation to discovery-driven planning, prescriptive entrepreneurship, business planning, lean startup, and design thinking

There has been a growing interest among entrepreneurs and students in explicit guidance for entrepreneurial action. Both scholars and practitioners have responded to this demand by suggesting a variety of entrepreneurial methods. This has led, however, to a proliferation of relatively unrelated methods with varying degrees of rigor and relevance. In an attempt to organize and bring clarity to the range and diversity of entrepreneurial methods, this article compares effectuation with five other entrepreneurial methods along nine conceptual dimensions. Through the application of two conceptual frameworks, core underpinnings of each method are highlighted. In addition to revealing similarities and differences between the methods, the study identifies some key implications for theory, practice, policy, and education. The strengths of effectuation on a theoretical level could be used to develop other entrepreneurial methods. Conversely, the strengths of other entrepreneurial methods could be used to shore up the potential weaknesses of effectuation, such as a lack of behavioral tactics and limited applicability in later stages of venture development. Findings from this article can thus aid entrepreneurship scholars and practitioners to improve their prescriptions and can create new avenues for developing entrepreneurial methods.

Entrepreneurial orientation and start-ups' external financing

This study extends the Pecking Order Theory by investigating the role of start-ups' strategic posture for financial decision-making. Using a contingency approach, it proposes that a start-up's entrepreneurial orientation differently affects the costs and benefits associated with external debt and equity financing, and thereby its use of the respective financing forms; with the strength of these relationships depending on industry-level risk and venture development stage. The study tests and confirms these hypotheses on a sample of 4456 German start-ups. It advances the entrepreneurial finance literature by taking strategic posture and its contingencies into account, and adds insight in the relationship between entrepreneurial orientation and firm performance. It also provides valuable practical implications for start-up founders and external financiers.

Two sides of the same coin

Nowadays, many digital start-ups fail in the early stages of their venture creation process. The main reason for the failure can often be found within the business model. Successful entrepreneurs agree on the fact that the destiny of a start-up highly depends on the decision-making ability of the respective entrepreneur. However, there is dissent in practice and academia whether decisions concerning the business model need to be made differently depending on the venture development stage. Some thought leaders recommend that entrepreneurs plan for every contingency in their business model (causation theory), while others favour a behaviour where the entrepreneur should work with the resources and the set of skills, which are currently available (effectuation theory). Using semi-structured expert interviews, our study provides first empirical evidence that effectuation and causation are no substituting but rather synergetic entrepreneurial approaches within business model development that are often applied simultaneously.

Two sides of the same coin - how the application of effectuation and causation shapes business model elements throughout the development stages of digital start-ups

Nowadays, many digital start-ups fail in the early stages of their venture creation process. The main reason for the failure can often be found within the business model. Successful entrepreneurs agree on the fact that the destiny of a start-up highly depends on the decision-making ability of the respective entrepreneur. However, there is dissent in practice and academia whether decisions concerning the business model need to be made differently depending on the venture development stage. Some thought leaders recommend that entrepreneurs plan for every contingency in their business model (causation theory), while others favour a behaviour where the entrepreneur should work with the resources and the set of skills, which are currently available (effectuation theory). Using semi-structured expert interviews, our study provides first empirical evidence that effectuation and causation are no substituting but rather synergetic entrepreneurial approaches within business model development that are often applied simultaneously.

How Entrepreneurs use Networks to Address Changing Resource Requirements during Early Venture Development

Access to resources is a key challenge facing entrepreneurs during early venture development. Entrepreneurs’ networks serve as a principal means of identifying and acquiring needed resources. However, different stages of venture development may address different resource dependencies, suggesting entrepreneurs’ networks may need to change to meet changing resource requirements. By employing network theory and resource–dependence theory, we investigate how entrepreneurs may use networks to address changing resource needs during early venture development. Results illustrate how structural characteristics of entrepreneurs’ networks at venture launch are associated with network structure and content in early venture development in ways that may promote access to newly needed resources.

The effects of network's structural holes: polycentric institutions, product portfolio, and new venture growth in China and Russia

AbstractThis study examines the effect of network's structural holes (i.e., the absence of a link between two contacts who are both linked to an actor) on product development and profit growth of software ventures in two different institutional contexts—China and Russia. Using interview data of 159 software entrepreneurs in Beijing and Moscow, the study found that the effect of structural holes is contingent upon country institutional context and venture development stage. Specifically, structural holes have a positive main effect on product portfolio, but a negative main effect on profit growth in the second revenue year (early stage of venture development). Structural holes are more useful in the Russian institutional context compared to the Chinese institutional context due to the polycentricity of institutions. The research implications of the findings are discussed. Copyright © 2010 Strategic Management Society.