Family Founding Teams, Internal and External Collaboration, and New Venture Growth

2019 ◽  
pp. 730-753
Author(s):  
Suho Han ◽  
Sae Young Lee ◽  
Melissa E. Graebner
Keyword(s):  
Initial Public Offering ◽  
Family Relationships ◽  
New Ventures ◽  
High Growth ◽  
Strategic Decision ◽  
New Venture ◽  
Family Ties ◽  
Research Questions ◽  
External Collaboration ◽  
Public Offering

Despite the prevalence of spousal, sibling, and parent–child ties within venture founding teams, little research has examined how family relationships among founders influence early entrepreneurial processes. This chapter explores how family relationships within founding teams influence internal and external collaboration. Within the firm, the chapter focuses on collaboration issues related to recruitment, changes in the management team, and strategic decision making. Beyond the firm’s boundaries, the chapter focuses on collaboration with external investors, strategic partners, potential acquirers, and post–initial public offering stakeholders. It draws upon the literatures on family businesses and high-growth new ventures to explore how family ties may influence collaboration processes over three broad stages of venture development: seed, commercialization, and growth and exit. The chapter concludes by highlighting unanswered research questions and by identifying relevant methodologies, settings, and data sources with which to address these gaps.

Externally Acquired or Internally Generated? Knowledge Development and Perceived Environmental Dynamism in New Venture Innovation

2017 ◽  
Vol 42 (1) ◽  
pp. 24-46 ◽  
Author(s):  
Alexander McKelvie ◽  
Johan Wiklund ◽  
Anna Brattström
Keyword(s):  
Boundary Conditions ◽  
New Ventures ◽  
High Growth ◽  
New Venture ◽  
Knowledge Development ◽  
Knowledge Generation ◽  
Relative Importance ◽  
Growth Sector ◽  
Market Knowledge ◽  
External Market

We investigate the relative importance of external market knowledge acquisition and internal knowledge generation in new venture innovation. We argue that the effectiveness of externally acquired knowledge is less important in environments that are perceived as highly dynamic. To test our model, we examine 316 new ventures in one singular, high-growth sector. We find that managers have different interpretations of dynamism within this single sector and that these perceptual variations have important implications for how new ventures develop knowledge in pursuit of innovation. In so doing, we illustrate important within-sector mechanisms and boundary conditions behind new venture knowledge development and innovation.

Survival of Initial Public Offerings on Europe’s New Stock Markets

2018 ◽  
pp. 533-558 ◽  
Author(s):  
Tao Jiao ◽  
Peter Roosenboom ◽  
Giancarlo Giudici
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Stock Markets ◽  
Early Stage ◽  
High Growth ◽  
Barriers To Entry ◽  
Main Hypothesis ◽  
Public Offerings ◽  
Similar Survival ◽  
Public Offering

Nearly 20 competing new stock markets opened their doors in 12 Western European countries during 1995–2005. These stock markets copied the NASDAQ model, with low barriers to entry and tight disclosure rules, and had one common aim—to attract untested, early stage, innovative, and high-growth small and medium-sized enterprises (SMEs). The main hypothesis of this chapter is that by setting the entry barriers too low, these new markets risked attracting too many low-quality firms, creating a “lemons problem” that negatively impacted the survival prospects of all firms listed on that market. The key finding is that the initial public offering (IPO) firm failure on six of these new stock markets is almost double the IPO firm failure on long-established official stock markets with more stringent listing requirements. The exception is the unregulated Alternative Investments Market, where firms have similar survival prospects compared to companies listing on London’s Official List.

Determinants of the exit value in European venture capital-backed technology startups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benedetta Montanaro ◽  
Angelo Cavallo ◽  
Giancarlo Giudici ◽  
Antonio Ghezzi
Keyword(s):  
Human Capital ◽  
Venture Capital ◽  
Initial Public Offering ◽  
New Ventures ◽  
Content Type ◽  
Investor Heterogeneity ◽  
Public Offering ◽  
The Impact ◽  
The Empirical Analysis ◽  
Technology Startups

Purpose This study aims to analyze the impact of different exit alternatives, investor presence and founders’ human capital on the exit value of European venture capital (VC)-backed high technology startups. Design/methodology/approach The empirical analysis is based on a sample of 107 European firms that obtained an exit through Merger&Acquisition (M&A) or an initial public offering (IPO) between 2010 and 2017, backed by VC investors. Findings This study provides empirical evidence on how different exit alternatives, investor heterogeneity and founders’ human capital may affect the exit value of European VC-backed startups. Exiting through an IPO and retaining a larger equity stake are positively correlated with the exit value. The presence of business angels and non-governmental VC firms is associated with larger valuations. Founders’ previous education was positively correlated with the exit value. Originality/value Exit strategies in technology startups are essential to capitalize investors’ efforts and reinvest cash into new ventures, supporting the development of entrepreneurial ecosystems and countries’ competitiveness. The results of this study provide interesting hints for policymakers and contribute to an in-depth understanding of the drivers of exit valuation for startups.

Learning from rivals: the memory-inconsistent strategy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chuandi Jiang ◽  
Jeffrey Muldoon ◽  
Hadi Alhorr
Keyword(s):  
Organizational Learning ◽  
New Ventures ◽  
Organizational Memory ◽  
Strategic Decision ◽  
New Venture ◽  
Multiple Sources ◽  
Content Type ◽  
Strategic Resources ◽  
Organizational Inertia ◽  
And Performance

PurposeThe purpose of this paper is to examine the role of competitive memory that assists the new ventures to overcome challenges due to the liability of newness in the strategic adaptation stage.Design/methodology/approachThis is a conceptual paper. Through a critical literature review on new venture survival and organizational memory, the authors identified the possibility for new ventures to learn from other firms from organizational learning and resource-based perspectives.FindingsThe authors found that new ventures can acquire and analyze the existing rivals' strategic moves documented in multiple sources, such as published yearbook, financial report, media, etc., and develop their own strategies. New ventures can also benefit from the relatively high degree of organizational inertia of existing rivals.Practical implicationsNew venture survival and performance are substantially affected by the initial organizational learning and strategic decision-making. Applying the memory-inconsistent strategy (MIS), new ventures that lack competitive experiences can learn from their rivals by internalizing the rivals' competitive memory as strategic resources and utilizing such resources to develop a competitive strategy.Originality/valueNew venture research in competitive markets focuses on the challenges and difficulties due to the lack of experiences, neglecting the fact that new ventures can learn from competitive memories of existing rivals. However, the lack of competitive experiences also means a lower degree of organizational inertia and other strategic commitments. The authors introduce the MIS and suggest that new ventures can benefit from strategic flexibility and create a temporary competitive advantage by surprising existing firms.

scholarly journals Analysis of the dynamics of IPO transactions in the banking sector

2021 ◽  
Vol 25 (6) ◽  
pp. 16-28
Author(s):  
V. A. Belyaev
Keyword(s):  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Banking Sector ◽  
High Growth ◽  
Graphical Analysis ◽  
Growth Potential ◽  
The World ◽  
Public Offering ◽  
Lending Institutions ◽  
Credit Institutions

IPO (initial public offering) is a widespread financing instrument in the world, however, the scientific community pays little attention to the dynamics of IPOs in the banking sector. The aim of the study is to critically analyze the dynamics of IPO transactions of credit institutions on the horizon from January 1, 2000, to December 31, 2020. The research methodology includes analytical methods for collecting and processing information, comparative and graphical analysis of the database collected by the author and consisting of 305 IPOs of banks from 2000 to 2020. The study compares the dynamics of IPO transactions of credit institutions from developed and developing countries, identifies characteristics inherent in each market, and explains the differences in market dynamics. The study reveals clustering in the IPO market of credit institutions and compares clustering with the general market of initial public offerings. It is shown that lending institutions around the world have actively attracted funds through IPO, having placed their shares for a total of $ 218 billion. The bulk of the funds were attracted by banks from emerging markets, primarily from China. During this period, there were 3 IPO waves on the banking IPO market, characterized by a significant increase in placement volumes and profitability on the first day of trading. This clustering in the IPO market of credit institutions was not typical only for the banking sector but coincided with the global growth in the number of transactions and IPO yields. The author concludes that the placement of shares of credit institutions during the hot market period is the most promising in terms of the volume and dynamics of raising funds; the IPO market of credit institutions retains high growth potential, primarily in Asia and the CIS.

Firm–Specific Human Capital and Governance in IPO Firms: Addressing Agency and Resource Dependence Concerns

2009 ◽  
Vol 33 (4) ◽  
pp. 845-865 ◽  
Author(s):  
Jonathan D. Arthurs ◽  
Lowell W. Busenitz ◽  
Robert E. Hoskisson ◽  
Richard A. Johnson
Keyword(s):  
Human Capital ◽  
Initial Public Offering ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
New Venture ◽  
Start Up ◽  
Dependence Theory ◽  
Contingent Compensation ◽  
Public Offering ◽  
Specific Human Capital

Entrepreneurs with firm–specific human capital represent both a potential source of competitive advantage and a threat to appropriate the rents that are ultimately generated by a new venture. This situation presents interesting agency and resource dependence challenges. While potential investors in these ventures will want assurances that their interests are protected, they will also want to ensure that these key entrepreneurs remain with the organization. Using agency theory and resource dependence theory, we examine the types of governance mechanisms that are implemented in firms going through an initial public offering comparing those ventures which indicate a dependence on these critical entrepreneurs versus those that do not. Our analysis reveals that ventures exhibiting dependence on key entrepreneurs are associated with higher insider and outsider ownership by the board, greater start–up experience by the board, greater use of contingent compensation, and greater use of involuntary departure agreements.

Growth intentions in family-based new venture teams

2019 ◽  
Vol 58 (6) ◽  
pp. 1190-1209 ◽  
Author(s):  
Fernando Muñoz-Bullón ◽  
Maria J. Sanchez-Bueno ◽  
Mattias Nordqvist
Keyword(s):  
Family Involvement ◽  
New Ventures ◽  
Panel Study ◽  
New Venture ◽  
Nascent Entrepreneurs ◽  
Content Type ◽  
Family Ties ◽  
The Usa ◽  
Family Based ◽  
Using Data

Purpose The purpose of this paper is to investigate how family ties in new venture teams (NVTs) influence the intended future growth of a nascent entrepreneur’s business. The authors posit that R&D-oriented entrepreneurs in NVTs with family ties have higher growth intentions relative to those who are less oriented toward R&D. Design/methodology/approach The hypotheses were tested using data from the Panel Study of Entrepreneurial Dynamics II (PSED II). One distinctive feature of the PSED is that it is based on a random sample of 1,214 nascent entrepreneurs in the process of starting new ventures in the USA, which overcomes the recall biases associated with surveying entrepreneurs already in business and potential survivorship biases. Findings The results show that growth intentions in NVTs with family ties is greater when the nascent entrepreneur shows an R&D behavior, even though the presence of family members in the team is negatively related to the intentions of nascent entrepreneurs with regard to new venture growth. This effect is attributed to entrepreneurs’ long-term vision and a more favorable attitude toward change. Research limitations/implications Data on startup teams in the PSED II come from one team member (the respondent). Therefore, differences in perceptions regarding growth intentions cannot be determined. Moreover, the sample consisted exclusively of nascent entrepreneurs in the USA. Practical implications Knowledge about the determinants of growth intentions during the venture creation phase becomes relevant if we want to influence and support the growth of newly founded firms. Nascent entrepreneurs need to understand the trade-off between emotional and financial concerns. Social implications Nascent entrepreneurs more oriented toward R&D become more risk tolerant, and may accept certain losses to their emotional endowment in favor of pure financial goals, being more able to access the additional external resources (tangible and intangible) needed for growth. Originality/value The research expands previous evidence on the family involvement-performance debate in large firms by focusing on new ventures with family ties, with distinctive characteristics that may affect growth intentions. The authors also shed new light on the interplay between family business and entrepreneurship. In particular, the research helps gain an understanding of how NVTs with family ties deal with the opposition between the benefits from venture growth and the tendency to preserve team member’s emotional attachment.

Technological Knowledge, Innovation and Risk-taking Capability and International New Venture’s Performance

2013 ◽  
Vol 64 (3) ◽  
Author(s):  
Mohd. Hassan Mohd. Osman ◽  
Azizallah Roudini ◽  
Alireza Heidarzadagan
Keyword(s):  
Risk Taking ◽  
New Ventures ◽  
Technological Knowledge ◽  
Strategic Decision ◽  
New Venture ◽  
International New Ventures ◽  
International Performance ◽  
Knowledge Innovation ◽  
Data Collation ◽  
Venture Firms

The choice of technological knowledge with innovation & risk- taking capability is a significant strategic decision for the success of international new ventures (INVs) performance. Therefore, this study’s aim is to offer a new construct, build up the conception model ” technological knowledge- innovation & risk- taking capability- international new venture’s performance”. And to examine how technology knowledge and innovation & risk- taking capability of international new venture’s (INVs) firms help to them in the development of international performance. Based on the literature of the investigation, it exhibits the theoretical supporting for positive connections between variables in the proposed model. Therefore, the study will use a mix-method approach to sequential explanatory design for testing the hypotheses. An email survey instrument would be utilized for data collation. The sample of the investigation is Malaysian international new venture firms that consist of products and services. It is expected to contribute to knowledge as a resource and international entrepreneurship by illustration a model of technological knowledge, Innovation & Risk- taking Capability and international performance.

The Structure and Role of the Underwriting Syndicate

2018 ◽  
pp. 389-411
Author(s):  
Sébastien Dereeper ◽  
Armin Schwienbacher
Keyword(s):  
United States ◽  
Initial Public Offering ◽  
The United States ◽  
Future Research ◽  
Comprehensive Picture ◽  
Research Findings ◽  
Syndicate Structure ◽  
Research Questions ◽  
Public Offering

This chapter presents research findings on the structure and role of underwriter syndicates in the initial public offering (IPO) process, thereby extending the list of participants beyond the lead underwriter. The authors rely on recent studies to offer a more comprehensive picture of syndicate structure and size in Europe and the United States. Research questions being addressed include the following: How are underpricing and reputation linked to syndicates? How many banks should be included in the syndicate? What responsibilities can be shared? Finally, the chapter concludes with a discussion of avenues for future research on IPO syndicate structure.

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