The heavy cost of kumbaya–understanding the survival implications of nascent venture ownership structure

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
David Noack ◽  
Douglas R. Miller ◽  
Rebecca Guidice
Keyword(s):  
Ownership Structure ◽  
Critical Time ◽  
Psychological Ownership ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Content Type ◽  
Team Members ◽  
Founding Team ◽  
The Impact

PurposeThis paper brings in relevant entrepreneurial behavior theory to understand the ownership decisions founders make during the nascent stage of new venture creation, and how such decisions impact the viability of the firm.Design/methodology/approachThe authors examine the behavior and decision making of 137 lead founders during the nascent stage of new venture creation. Psychological ownership and environmental uncertainty are measured of lead founders when dividing up firm ownership among the founding team. Using a longitudinal approach, these nascent-stage decisions are then analyzed to understand the impact on the new venture one year later.FindingsCounter to prior research suggesting teams are better off with identical wages and ownership, the authors find such harmony (i.e. “kumbaya”) pursuit to be a detriment to new venture emergence. Specifically, this study finds that nascent ventures are better off with an unequal ownership split among the founding team members. These findings suggest that nascent firms with an unequal split are more likely to move beyond the nascent stage and launch a functional business.Research limitations/implicationsAlthough the results of this study offer a valuable contribution to lead founders and new businesses, the study looked at each startup independent of another and is therefore not able to draw any conclusions related to competitiveness.Practical implicationsLead founders and founding teams frequently divide ownership evenly among the founders. This paper shows that, while convenient, the decision to divide ownership equally can hamper a nascent firm as it moves toward the launch phase of the startup process. These results should motivate founders to think deeply regarding the ownership structure decision and, at the very least, consider the possible negative costs associated with the pursuit of founding team unity.Originality/valueWhile scholars have brought attention to the nascent stage, few have identified and analyzed the decisions that take place during this critical time of the new venture development process. Furthermore, even is less is known of the impact nascent decisions have on startup launch. This study sheds light on these areas.

The art of entrepreneurial market creation

2014 ◽  
Vol 16 (2) ◽  
pp. 163-182 ◽  
Author(s):  
Kim Lehman ◽  
Ian Ronald Fillis ◽  
Morgan Miles
Keyword(s):  
New Venture ◽  
New Venture Creation ◽  
Additional Contribution ◽  
Venture Creation ◽  
Content Type ◽  
Entrepreneurial Marketing ◽  
Market Creation ◽  
Arts Marketing ◽  
The Impact

Purpose – The purpose of this paper is to use the case of the Museum of Old and New Art (MONA) in Hobart, Tasmania, to investigate the role of entrepreneurial marketing (EM) in shaping an arts enterprise. It draws on the notion of effectuation and the process of EM in explaining new venture creation and assesses the part played by David Walsh, the entrepreneurial owner/manager. Design/methodology/approach – This case study analysis enables an in-depth appraisal of the impact of EM and effectuation within the growing domain of arts marketing. Findings – The paper offers a glimpse into how creativity and business interact in the creation of new markets. It demonstrates how formal methods of marketing are bypassed in the search for owner/manager constructed versions of situational marketing. In addition, it provides insight into dominance of entrepreneur-centrism vs customer-centrism in entrepreneurship marketing. An additional contribution to knowledge is the use of effectuation to assist in better understanding of the role of EM in the market creation process. Originality/value – The research carried out here builds on a growing body of work adopting the EM lens to better understand arts marketing and new venture creation.

scholarly journals Founding team experience, industry context, and new venture creation

2018 ◽  
Vol 21 (1) ◽  
pp. 2-21
Author(s):  
Jun Li ◽  
Dev K. Dutta
Keyword(s):  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Data Set ◽  
Content Type ◽  
Technology Industry ◽  
Industry Environment ◽  
Team Experience ◽  
Founding Team ◽  
Industry Experience

Purpose The purpose of this paper is to examine the role of founding team experience (industry and venturing) in new venture creation. This paper posits the following questions: How does founding team experience influence the likelihood of new venture creation, in the nascent stage? How does industry context moderate this relationship? The study aims to fill an important gap in the literature by unpacking the impact of different types of founding team experiences on venture outcome, and by focusing on the influence of founding team in the venture creation process, specifically at the nascent stage. Design/methodology/approach The paper utilizes data from the Second Panel Study of Entrepreneurial Dynamics, a longitudinal data set of 1,214 nascent entrepreneurs in the USA. Logistics regression was employed to analyze the effect of founding team experience on new venture creation. Post hoc analysis was conducted to ensure the confidence of the findings. Findings The paper provides empirical insights about how founding team experience influences the likelihood of new venture creation in the nascent stage. At the nascent stage, founding team industry experience positively affects new venture creation while founding team venturing experience does not. However, in the high-technology industry environment, the influence of the founding team’s venturing experience on new venture creation is stronger than that in the low-technology industry environment. Research limitations/implications Due to the design of the data set, there is a risk of “right-censoring” problem. Also, because the study used archival data on founding teams, the methodology did not allow for uncovering the underlying team processes and dynamics during the venture creation process based on learning from experience. Future studies are encouraged to examine other types of founding team experience and the underlying process-level factors on venture creation. Practical implications The paper provides important practical implications for nascent entrepreneurs/entrepreneurial teams on team assembling and composition. In general, a team with higher-level industry experience is critical for venturing success. A team with higher-level venturing experience is more desired in the high-technology industry. Originality/value This paper fulfills an important gap in the entrepreneurial team literature by highlighting the complex and nuanced ways in which founding team experience influences the likelihood of venture creation in the nascent stage of the firm, especially after incorporating the additional impact of the industry context.

scholarly journals Venturing under fire

2018 ◽  
Vol 60 (7/8) ◽  
pp. 749-766 ◽  
Author(s):  
Oluwaseun Kolade
Keyword(s):  
Poverty Reduction ◽  
Single Case ◽  
New Venture ◽  
New Venture Creation ◽  
Youth Empowerment ◽  
Venture Creation ◽  
Content Type ◽  
Study Approach ◽  
University Undergraduates ◽  
The Impact

Purpose The purpose of this paper is to examine how a new entrepreneurship education (EE) intervention offered at conflict-ridden Maiduguri, Nigeria, is having transformative impacts through new venture creation and poverty reduction. Design/methodology/approach The paper adopts a single case study approach, drawing from in-depth interviews of participants, experts, and facilitators of the entrepreneurship training, in addition to relevant memos and documents. Findings The findings indicate that the EE programme is, by generating awareness and facilitating skill development, contributing to new venture creation, poverty reduction, and positive change in mindset. However, the impact is limited by inadequate support through venture capital and limited facilities for business incubation. Research limitations/implications This study is limited in its focus on EE provided for university undergraduates and graduates. Further research should explore interventions aimed at less-educated youth in the region, and in other conflict contexts. Social implications The study suggests that EE facilitates youth empowerment through venture creation, in the process transforming them from aggrieved outsiders to active stakeholders in societal peace and national prosperity. Originality/value The nascent theory of transformative entrepreneuring identifies poverty reduction and conflict resolution as the main mechanisms. This paper focuses on how EE triggers new venture creation, which in turn contributes to poverty reduction and overall change in mindset of otherwise unemployed and aggrieved youths.

Monkey see, monkey do? Examining the effect of entrepreneurial orientation and knowledge sharing on new venture creation for Gen Y and Gen Z

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Hamdi ◽  
Nurul Indarti ◽  
Hardo Firmana Given Grace Manik ◽  
Andy Susilo Lukito-Budi
Keyword(s):  
Knowledge Sharing ◽  
Entrepreneurial Orientation ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Content Type ◽  
Gen Y ◽  
Two Generations ◽  
Gen X ◽  
Practical Implications

Purpose This study aims to examine the effect of entrepreneurial intention and attitude towards knowledge sharing on new business creation by comparing two generations, Y generation (millennials) and Z generation (post-millennial). In addition, the current study uses a social cognitive theory as a point of departure to test the research hypotheses. Design/methodology/approach This study deploys a quantitative approach (hypothetic-deductive approach) by surveying 300 respondents representing the two Indonesian generations. The questionnaire consisting of demographic items (age, education, etc.) and variables was the primary research instrument. This study used regression analysis, a Wald test for examining the proposed hypotheses and a t-test to provide a deeper analysis of the findings. Findings Findings from the current study show that Gen Y is still seeking a balance for their learning sources by involving in their social environments as well as exploring the digital world. In contrast, Gen Z is much more dominant in the independence to learn things that interest them. They have less dependency on social patrons but prioritise themselves as the leading model. Practical implications The findings of this study provide practical implications for higher education institutions in the development of entrepreneurship education to achieve learning effectiveness. Originality/value This study aims to contribute by providing empirical evidence in the effect of entrepreneurial orientation and attitude towards knowledge sharing on new venture creation with particular reference to Gen Y and Gen Z, suggested by previous studies. Although Gen Y and Gen Z are digital natives, this study provides insight into a shift in the characteristic of two generations, as also found in comparison to previous generations, such as Baby-Boomer vs Gen X and Gen X vs Gen Y. This study proclaims the need to adjust organisational theories to enable them to explain the shifting phenomena at the micro and macro level for every generation. Exploratory research to better understand the characteristics of a generation in other settings is a crucial proposal proposed by this study.

scholarly journals An exploration of the Business Plan Competition as a methodology for effective nascent entrepreneurial learning

2018 ◽  
Vol 24 (1) ◽  
pp. 121-146 ◽  
Author(s):  
Kayleigh Watson ◽  
Pauric McGowan ◽  
James A. Cunningham
Keyword(s):  
Learning Outcomes ◽  
Business Plan ◽  
New Venture ◽  
Critical Examination ◽  
New Venture Creation ◽  
Venture Creation ◽  
Nascent Entrepreneurs ◽  
Entrepreneurial Learning ◽  
Content Type ◽  
Nascent Entrepreneur

Purpose Business Plan Competitions (BPCs) are readily prescribed and promoted as a valuable entrepreneurial learning activity on university campuses worldwide. There is an acceptance of their value despite the clear lack of empirical attention on the learning experience of nascent entrepreneurs during and post-participation in university-based BPCs. To address this deficit, the purpose of this paper is to explore how participation in a university-based BPC affords entrepreneurial learning outcomes, through the development of competencies, amongst nascent entrepreneurs. Design/methodology/approach Underpinned by a constructivist paradigm, a longitudinal qualitative methodological approach was adopted. In-depth interviews with nascent entrepreneur participants of a UK university-based BPC were undertaken at the start and end of the competition but also six months after participation. This method enabled access to the participant’s experiences of the competition and appreciation of the meanings they attached to this experience as a source of entrepreneurial learning. Data were analysed according to the wave of data collection and a thematic analytical approach was taken to identify patterns across participant accounts. Findings At the start of the competition, participation was viewed as a valuable experiential learning opportunity in pursuit of the competencies needed, but not yet held, to progress implementation of the nascent venture. At the end of the competition, participants considered their participation experience had afforded the development of pitching, public speaking, networking and business plan production competencies and also self-confidence. Six months post-competition, participants still recognised that competencies had been developed; however, application of these were deemed as being confined to participation in other competitions rather than the routine day-to-day aspects of venture implementation. Developed competencies and learning remained useful given a prevailing view that further competition participation represented an important activity which would enable value to be leveraged in terms of finance, marketing and networking opportunities for new venture creation. Research limitations/implications The findings challenge the common understanding that the BPC represents an effective methodology for highly authentic, relevant and broadly applicable entrepreneurial learning. Moreover the idea that the competencies needed for routine venture implementation and competencies developed through competition are synonymous is challenged. By extension the study suggests competition activities may not be as closely tied to the realities of new venture creation as commonly portrayed or understood and that the learning afforded is situated within a competition context. Competitions could therefore be preventing the opportunities for entrepreneurial learning that they purport they offer. Given the practical importance of competition participation as a resource acquisition activity for nascent entrepreneurs, further critical examination of the competition agenda is necessary as too is additional consideration about the design of such competitions and how such competitions should feature within university policy to support new venture creation. Originality/value This study contributes to the limited literature and studies on BPCs by focussing on its effectiveness as a means of providing entrepreneurial learning for participants. The key contribution taking it from an individual nascent entrepreneur participant perspective is that the competencies afforded through competition participation are more limited in scope and application than traditionally promoted and largely orientated towards future BPC participation. Learning is mainly situated for competition sake only and about participants securing further resources and higher levels of visibility. As the nascent entrepreneurs intended learning outcomes from competition participation are subsequently not realised, the study highlights a gap between the intended and actual outcomes of competition participation.

scholarly journals Entrepreneurial learning: what do we mean by it?

2019 ◽  
Vol 26 (6) ◽  
pp. 560-573 ◽  
Author(s):  
Tadeu Fernando Nogueira
Keyword(s):  
Literature Review ◽  
Design Methodology ◽  
Systematic Approach ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Entrepreneurial Learning ◽  
Content Type ◽  
Crucial Component ◽  
Key Issues

Purpose Given the growing recognition that learning plays a crucial role in entrepreneurship, this paper aims to systematically review the literature on entrepreneurial learning (EL), take account of its progress and analyze the unique characteristics of EL as a concept. Design/methodology/approach This paper uses a systematic approach to reviewing the literature on EL and critically assess the EL concept through the criteria of resonance, attributes (involving consistency, fecundity and differentiation), domain and causal utility. Findings A synthesis and assessment of extant literature reveals that a key challenge is the clear articulation of EL as a concept. This paper takes the first steps toward the specification of EL through a discussion of its unique properties. In this respect, the paper proposes the understanding of EL as an undertaking of entrepreneurial (i.e. proactive, exploratory and collaborative) learning behaviors (a crucial component of the EL concept) and recommends the context of new venture creation as an appropriate domain for the study of EL. Research limitations/implications This paper paves the way toward a more robust specification of EL as a concept. Originality/value This systematic literature review initiates a discussion about how EL literature can find convergence on key issues, thus helping the field move forward. It does so by articulating central attributes of the EL concept.

Relationships among social capital, self-efficacy, and new venture creations

2018 ◽  
Vol 56 (1) ◽  
pp. 204-218 ◽  
Author(s):  
Kannadhasan M. ◽  
Parikshit Charan ◽  
Pankaj Singh ◽  
Sivasankaran N.
Keyword(s):  
Social Capital ◽  
Self Efficacy ◽  
Partial Least Square ◽  
Least Square ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Cross Sectional Survey ◽  
Cross Sectional ◽  
Content Type

Purpose The purpose of this paper is to examine the relationship of social capital with new venture creation, and whether self-efficacy plays a role in mediating the association between social capital and new venture creation. Design/methodology/approach Data were collected from 375 entrepreneurs through cross-sectional survey in India. The study used partial least square path modeling to assess the relationships among the variables. Findings Findings reveal that social capital is positively related to new venture creation. The association of social capital and new venture creation is fully mediated by entrepreneurs’ self-efficacy. Originality/value The role of social capital in the success of new venture creations through self-efficacy is useful to the potential entrepreneurs and people who facilitate new venture creation in Indian context.

scholarly journals Regional Opportunities and Policy Initiatives for New Venture Creation

2009 ◽  
Vol 27 (5) ◽  
pp. 608-625 ◽  
Author(s):  
Ingrid Verheul ◽  
Martin Carree ◽  
Enrico Santarelli
Keyword(s):  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Firm Formation ◽  
Large Cities ◽  
Policy Initiatives ◽  
New Firm Formation ◽  
Italian Provinces ◽  
New Firm ◽  
The Impact

This article investigates the determinants of new venture creation across industries and locations for 103 Italian provinces between 1997 and 2003. Allowing for differences in regional opportunities across industries, we investigate the impact of a range of factors, including policy initiatives, on new firm formation in manufacturing, retailing and wholesaling, hotels and restaurants. Our results show that regions with industrial districts are characterized by higher start-up rates in manufacturing and that wage costs deter entry in this industry. Firm entry in commercial sectors appears to be higher in large cities and areas with strong economic progress. For hotels and restaurants we find that tourism positively influences new firm formation. We do not find a significant effect of recently introduced regional laws promoting new firm formation in Italy.

scholarly journals Creating ventures: decision factors in new venture creation

2016 ◽  
Vol 10 (1) ◽  
pp. 151-167 ◽  
Author(s):  
William W. Kirkley
Keyword(s):  
Decision Making ◽  
Pilot Study ◽  
Research Design ◽  
Cognitive Processes ◽  
New Venture ◽  
New Venture Creation ◽  
Venture Creation ◽  
Content Type ◽  
Entrepreneurial Decision ◽  
Larger Sample

Purpose The purpose of this pilot study was to identify the key factors that influence the decisions of entrepreneurs who are considering the creation of a new venture. The pilot was conducted to explore the cognitive antecedents of entrepreneurial decision-making and whether specific factors contribute to the decision to create a new venture. Design/methodology/approach The study utilised an inductive and interpretive research design within a constructivist paradigm. The sample comprised entrepreneurs situated in a business incubation unit who engaged in a series of semi-structured interviews. The results of this study will be used to refine the questions asked in preparation for a larger sample using in-depth interviews with identified entrepreneurs. The resulting narrative in this pilot was subjected to discourse analysis and is categorised into relevant themes. Findings The findings in this pilot study reveal that factors such as technological advancement, market opportunity, competition, customer demand and prevailing market conditions have a significant influence on the decision-making process involved in creating a new venture. Research limitations/implications Although the pilot has identified several factors in entrepreneurial decision-making, further work will be needed in the research design to be able to expose the cognitive processes associated with each factor. The aim is to identify the common cognitive characteristics associated with thinking through the decision to create a new venture with a much larger sample of entrepreneurs. Originality/value The value of this research lies in exploring and developing a better understanding of the antecedent cognitive processes used by entrepreneurs for identifying unique, innovative new ideas and converting them into exploitable products or services through new venture creation.

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