Entrepreneurial organizing activities and nascent venture performance

This research provides an improved understanding of how ventures successfully organize via resource allocations. Conceptually, we apply elements of action theory to account for resource trade-offs that occur as entrepreneurs make decisions about adding staff members to boundary spanning, technical core, and management functions. We then model how these allocation decisions differentially impact nascent venture performance. Empirically, we test our model with a sample of 2484 entrepreneurs captured in the Kauffman Firm Survey, a longitudinal dataset that tracks a random sample of US startups over an 8-year period. Results from dynamic panel estimation reveal evidence of both performance penalties and performance boosts as the result of entrepreneurs adding staff to specific areas, revealing optimality in specific configurations of entrepreneurial organizing elements.

Team Ventures and Acquisition Exits: Are Team-Founded Ventures More Likely to be Acquired?

We investigate whether team ventures are more likely to be acquired than single-founder ventures, and if so, attempt to determine what number of founders results in the highest acquisition likelihood. Using the Kauffman Firm Survey (KFS) of US businesses started in 2004, our results indicate that team-founded new ventures are more likely to be acquired, and that there is a positive and diminishing relationship between team size and acquisition likelihood. This study contributes to the understanding of drivers of exit for new ventures, and opens up the new venture exit literature to future contributions of a team demography approach.

Black and White: Access to Capital Among Minority-Owned Start-ups

We used confidential and restricted-access data from the Kauffman Firm Survey and matched administrative data on credit scores to explore racial disparities in access to capital for new business ventures. The novel results on racial inequality in start-up financing indicate that Black-owned start-ups start smaller and stay smaller over the entire first eight years of their existence. Black start-ups face more difficulty in raising external capital, especially external debt. We find that disparities in creditworthiness constrain Black entrepreneurs, but perceptions of treatment by banks also hold them back. Black entrepreneurs apply for loans less often than White entrepreneurs largely because they expect to be denied credit, even when they have a good credit history and in settings where strong local banks favor new business development. This paper was accepted by David Simchi-Levi, finance.

Factors Determining the Survival of New Companies

This article discusses the determinants of the survival of new companies, with particular emphasis on their sources of financing. We have analysed the impact of experience in the same focal industry, of having a competitive advantage and intellectual property rights (patents and trademarks) and of debt financing on the probability of a start-up's survival, using a logit model based on the Kauffman Firm Survey (KFS) database data covering 4,928 American companies which operated from 2004 to 2011. Additionally, we can demonstrate that start-ups that use debt financing have a better chance of staying in business. Factors such as intellectual capital and competitive advantage are also positively correlated with the prospects for start-up survival.

Money Matters: An Examination of the Impact of Financial Structure on Nascent Venture Performance; Evidence from the Kauffman Firm Survey

This study was carried out to empirically test the impact of financial structure on nascent enterprise performance. The study used a centralistic nomothetic longitudinal methodology to examine a panel data derived from the first four years of the Kauffman firm Survey (KFS). The result revealed that financial structure (equity financing, debt financing, and trade-financing) influenced nascent enterprise performance, but inconsistently over the first four years of business existence. The average capital structure of the sample was supported by the literature and followed the pecking order of equity, debt, and trade financing. Results suggested that capital structure has an important ramification for nascent enterprise performance, but the capital mix of successful nascent enterprises do not necessarily follow an orthodox format.

The legal structure of ventures and exit routes: A study of single-founder start-ups in the United States

The purpose of this article is to focus on the role of the legal structure of ventures for the event of the entrepreneurial exit. Specifically, this study is to reveal the different effects of incorporated and non-incorporated legal structures of ventures on diverse exit routes. Using the Kauffman Firm Survey, this study investigated the relationship between the legal structure of ventures and their exit routes with a sample of 901 single-founder start-ups that were founded in 2004 and exited during 2005 to 2011 period. The finding of this study confirmed that ventures with an incorporated legal structure were less likely to exit by sale than ventures with a non-incorporated legal structure. While little research has considered the legal structure of ventures as a predictor of different exit routes, this study empirically suggests the importance of considering the forms of the legal status of ventures in studying entrepreneurial exit routes.

Gender and Overconfidence in the Kauffman Firm Survey

While an emerging line of research has begun to examine how firm survival correlates with the psychological trait of overconfidence, almost none of this work looks at how this relationship is mediated or modified by the minority status of the individual within the area of entrepreneurship. We employ a proportional hazard survival model and analyze the Kauffman Firm Survey (KFS) of entrepreneurs during the period of 2004-2012. We find that, while overconfidence relates to firm survival, it is more strongly related to survival for female than for male entrepreneurs. Our analysis is unique in examining the trait of overconfidence for small firm survival, and it is the first that we know of to stratify the effects of this overconfidence by gender. The present work has implications for possible methods and strategies to promote the entrepreneurship of individuals from underrepresented groups, with an eye towards owner-overconfidence helping female-led firms to survive the first few years of a firm’s existence.

Entreprenurial Human Capital and Inward Technology Licensing in the Context of New Technology-Based Firms

This study investigates the rate of using ITL, specifically relating to the human capital (HC) of NTBFs: (1) Does HC of entrepreneurs have an influence on the ITL? (2) If so, then to what extent does specific HC and general HC demonstrate a different effect? Using a subset of 649 considerable NTBF’s, created from the seventh follow-up of the Kauffman Firm Survey longitudinal data, the study found that different HC within NTBFs may explain the rate of using external technologies, which answers the first question. The findings reinforce existing understandings of HTC, which concern the effect of HC on entrepreneurial activities such as opportunity search. In regards to the second research question, the found that level of general education and industry-specific startup experience are positively related to the rate of ITL. A major contribution of this study is that it presented evidence to support applicability of current insights of a specific innovation strategy, ITL, in the context of NTBFs.