Kurt Sandholtz and Walter W. Powell
This chapter examines entrepreneurs who carry ideas, technologies, values, and assumptions between previously unrelated spheres of economic or cultural activity and, in the process, change the existing order of things. The chapter labels such individuals amphibious entrepreneurs and explores their characteristics via four case studies. Their stories suggest a distinct species within the genus of entrepreneur: more pragmatic than heroic, and as likely to invent by not knowing any better as by calculative creation. The chapter discusses their role in creating interstitial spaces, contrasts them with other boundary-spanning actors, and identifies directions for future research at the intersection of social history and entrepreneurship.
Jiang Bian and Riitta Katila
Asymmetric partnerships—partnerships between small entrepreneurial and large established firms—are categorically distinct from large–large firm partnerships but have received considerably less scholarly attention. This chapter provides an overview of the literature on asymmetric partnerships by reviewing studies in the fields of organizational theory, strategy, and entrepreneurship. It identifies three literature streams: antecedents of asymmetric partnership formation, process dynamics and management of asymmetric partnerships, and the performance consequences on firms involved in asymmetric partnerships. The chapter reviews each stream’s major studies, summarizes and synthesizes the empirical findings and theoretical insights, and identifies future directions. To advance the literature, the chapter discusses research opportunities, highlighting fertile avenues such as field-based research to examine the evolving nature of asymmetric partnerships and the organizational black box of partnership management, and quantitative research to strengthen causal identification.
Phillip H. Kim, Manuel F. Ramírez, and Reddi Kotha
This chapter provides an overview of the technology commercialization process that occurs in research universities. With the assistance of technology transfer offices, inventors and licensing firms enter into collaborations to commercialize new inventions. This chapter highlights the major aspects of these relationships, including why collaborations are likely to stalemate when a party’s self-interest clashes with the overall objective of collaboration. It outlines some possible strategies for avoiding these stalemates to form effective partnerships. The chapter concludes by discussing avenues for future research.
This article reviews literature on the study of the cognition of entrepreneurs, and how this affects their attitudes to risk. The review begins with the heuristics and biases approach. Various decision-making biases related to over-optimism are then considered. Following this perceived self-efficacy, intrinsic motivation and intentions-based models are discussed. Some theories dealing specifically with attitudes to risk are then covered. These include prospect theory, Kahneman and Lovalo's model of risk-taking, and Das and Teng's theory of risk horizons and future orientations. Finally, the option value and information cost approach to the analysis of entrepreneurs' decision-making is discussed. Some relevant references to culture research are also given in the conclusion.
Peter G. Klein, Mark D. Packard, and Karen Schnatterly
This chapter looks inside the firm at how organizational design affects collaboration in pursuit of corporate entrepreneurship or “intrapreneurship.” It shows how the intrafirm “marketplace” of ideas, employees, and resources can be strategically configured to encourage or inhibit collaborative innovation. The chapter focuses on the key structural dimensions of autonomy, sponsorship, and incentives. Complementarities between these dimensions create spillover effects that produce unique innovation outcomes by mitigating barriers to collaboration such as knowledge problems, resource constraints, and employee motivation. Illustrating configurations of these dimensions with company examples, the chapter shows how organizational design affects intrapreneurship and offers suggestions on how firms might strategically align their organizational structure with their intrapreneurial strategy.
Christian Lechner, Birthe Soppe, and Karolina Heggli
Although interfirm collaborations between entrepreneurial firms and established partners have become ubiquitous in organizational and business life, academic research on collaborations between start-ups and large industry leaders has only received limited attention. Such collaborations are also known as “asymmetric” or “unbalanced” relationships. The purpose of this chapter is to provide a systematic literature review of the current state of research on collaborations between entrepreneurial and large firms. In particular, the chapter identifies several benefits and risks involved for entrepreneurial firms and uses the findings of the literature review as a springboard to provide a roadmap for future research on this timely topic.
Lyda Bigelow, Jennifer Kuan, and Kyle Mayer
Regional differences among industry clusters have long been a puzzle, especially when performance differences are significant. This chapter examines the case of venture capital investing, in which Silicon Valley differs from the rest of the world despite attempts to imitate its model. The point of entry in this chapter is the contract between venture capitalist and entrepreneur. Although such contracts have been analyzed in other research, this chapter argues that the psychological effects of different contract styles are of primary importance to innovative outcomes of entrepreneurial ventures. Thus, it argues that regulatory focus theory, which considers the psychological effects of contracting, is essential to understanding differences in practice and outcomes in venture capital clusters.
Michael B. Heeley and David R. King
The number of options owners of intellectual property confront in how best to exploit the inherent value of an innovation has expanded. New strategies for exploitation have developed in response to the greater fragmentation and overlap of the property rights needed to successfully commercialize new innovations. Although acting independently (go it alone) remains an option and can be enhanced with stealth, collaboration strategies are becoming the norm. The success of a selected collaborative strategy depends largely on a firm achieving or gaining the necessary freedoms to exploit its IP. This chapter reviews the different strategic options and develops a decision framework that can be used to help determine the conditions under which different collaborative strategies are optimal in dealing with fragmented property rights. It concludes by discussing the implications for management practice and research.
Raphael Amit, Xu Han, and Christoph Zott
This chapter addresses the role of collaboration in the design and operation of innovative business models in the digital era. It surveys and builds on a broad range of related literatures on collaboration and innovation to examine how collaboration affects business model innovation (BMI). The chapter suggests that collaboration within and across firms’ boundaries shapes both the design and operation stages of BMI. It contributes to the extant literature by taking the first step toward explicitly examining the link between collaboration and BMI and by incorporating the ramifications of digitization for both collaboration and BMI.
Douglas Cumming, Sofia Johan, and Yelin Zhang
An important topic in some areas of finance involves syndication, which refers to more than one investor in an investee firm. Investment syndication involves collaboration, particularly where investors are value-added active investors, and there are potential agency problems among syndicated investors. This chapter reviews the literature on collaboration across different sources of entrepreneurial finance. In particular, it considers angel investors, crowdfunding, technology parks, and venture capital and private equity funds. The chapter identifies cases when different types of investors work well together, as well as cases where the evidence indicates collaboration has been less than fruitful. The chapter concluded by identifying avenues for future research.
Founding and operating a firm is a collaborative process, but still little is known about the nature of collaboration between entrepreneurs and other members of the new-venture team, particularly key employees. For example, traditional entrepreneurship literature believed that founders always run their start-ups personally, at least in the early years of operation. However, recent empirical studies suggest that a significant share of founders hire CEOs for their start-ups at the time of founding or soon thereafter. This chapter explores what motivates founders to delegate managerial control to a hired agent, how founders choose their managers, and how they govern relationships with their CEOs.
Collaborative Market Making: The Critical Role of Dyadic and Multipartner Alliances in the Formation of New Markets
Pinar Ozcan and Kerem Gurses
Extant work has identified many aspects of market formation including the mechanisms and processes associated with the origins of new markets and the trajectories of market emergence. However, the critical role of interfirm alliances in the formation of new markets still remains unexplored. This chapter brings forward interfirm alliances as a critical tool for firms to fuel the formation of new markets, which are often characterized by high levels of demand, supply, and regulatory uncertainty. To take a systematic look at the role of alliances in market formation, the chapter first describes the different alliance forms under the general categories of dyadic and multipartner alliances. Within these categories, the chapter discusses the potential impact of the respective alliance type on reducing different levels of uncertainty and catalyzing market emergence. It also provides an extensive discussion of the challenges that firms typically face within each type of alliance with regards to market formation. The chapter concludes with directions for future research in exploring alliances as tools for market formation.
Timothy Kuhn and Dana Marshall
This chapter pursues a novel conception of communication to highlight the collaborative processes associated with entrepreneurship. In contrast to a representational stance in which information dissemination is emphasized, this chapter presents a constitutive/dialogic approach to communication. This latter orientation portrays communication as an ongoing process that creates, recreates, and transforms meanings—and, in so doing, constitutes individuals, organizations, and the social worlds they inhabit. Though the representational stance has dominated entrepreneurship scholarship, this chapter presents three foci of research on entrepreneurship and collaboration to illustrate the constitution of contemporary entrepreneurs’ identities, entrepreneurial ecosystems, and entrepreneurial ventures. Based on the review, the chapter suggests that future entrepreneurship and collaboration research both engages with communication as constitution of organization (CCO) theorizing and explores the increasingly globalized character of entrepreneurial organizing.
Siddharth Vedula and Casey J. Frid
Community social capital is increasingly recognized as an important regional resource for spurring entrepreneurial activity. A nascent but growing body of work has begun to link community social capital to entrepreneurship, focusing largely on outcomes such as rates of new venture creation. This chapter emphasizes ways in which community social capital can impact nascent entrepreneurship—namely, the activities founders undertake during the gestation phase before a new venture is created. It examines whether the types of activities undertaken by nascent entrepreneurs vary according to the prevalence (or absence) of community social capital within a region, and concludes with a research agenda for future work in this domain.
Serghei Musaji and Julio De Castro
Despite the continuous interest in studying entrepreneurial teams, the relationship between team composition and, particularly, team diversity and performance remains fertile ground for active debate. Taking roots in the knowledge-based view and organizational learning literatures, this chapter argues that performance in entrepreneurial teams is contingent on (a) the overlap between team members’ knowledge/competences and the content of the performed tasks, (b) the duplication of the team members’ knowledge in the areas with that content, (c) the nature of tasks (exploration or exploitation), (d) the team’s flexibility to adapt to changes in the content and nature of those tasks, and (e) the rate of environmental change. Because an important source of ambiguity in the understanding of how team diversity and performance are linked ties to issues of how team diversity is conceptualized and operationalized, the chapter also proposes a new way of looking at diversity in future research.
Ramana Nanda and Matthew Rhodes-Kropf
An extensive literature on venture capital has studied asymmetric information and agency problems between investors and entrepreneurs, examining how separating entrepreneurs from the investor can create frictions that might inhibit the funding of good projects. It has largely abstracted away from the fact that a start-up typically does not have just one investor, but several venture capital investors that come together in a syndicate to finance a venture. This chapter therefore argues for an expansion of the standard perspective to also include frictions within venture capital syndicates. Put differently, what are the frictions that arise from the fact that there is not just one investor for each venture, but several investors with different incentives, objectives, and cash flow rights who nevertheless need to collaborate to help make the venture a success? The chapter outlines the ways in which these coordination frictions manifest themselves, describes the underlying drivers, and documents several contractual solutions used by venture capital firms to mitigate their effects. The chapter’s broader perspective provides several promising avenues for future research.
This article reviews the academic literature on corporate venture capital, that is, minority equity investments by established corporations in privately-held entrepreneurial ventures. It starts with a detailed definition of the phenomenon. An historical background of Corporate Venture Capital (CVC) is presented, followed by an extensive review of CVC investment patterns. The article then presents scholarly findings beginning with firms' objectives, through the governance of their CVC programmes and the relationships with the portfolio companies and ending with a review of corporate, venture and CVC programme performance. The article concludes with directions for future research.
The Crowdfunding Paradigm: An Exploration of Founder–Funder Dynamics and their Implications for Capability Development and Long-Term Success
Sharon F. Matusik and Jessica Jones
Crowdfunding has become a major consideration for individuals looking to fund their ideas, endeavors, and businesses. This phenomenon raises interesting questions for management scholars, such as what theories help to explain the nuance of crowdfunding as a form of entrepreneurial financing. With regard to what leads to crowdfunding campaign success, this chapter argues that there are mixed motives associated with contributing to these campaigns, and theoretical dynamics vary according to these different motives. The chapter also notes two fundamental differences of crowdfunding from more traditional means of funding early-stage ventures: the nature of engagement and preference toward product or person. Drawing on theory related to capabilities, the chapter identifies conditions under which crowdfunding is likely to be more and less advantageous based on these two dimensions. In summary, it provides a model that explains important sources of heterogeneity (i.e., motives) and homogeneity (i.e., diffused engagement and product lock-in) within the crowdfunding phenomenon that add nuance to theory in the entrepreneurial financing literature.
Carole Howorth, Mary Rose, and Eleanor Hamilton
This article begins with an examination of definitions of family firms. The debate about what constitutes a family firm is every bit as complex as the definition of an entrepreneur. This article explores the range of definitions but shows that any definition needs to be interpreted in its economic, social, institutional, and cultural context. An explanation for the multiplicity of definitions is provided in in this article, which explores the diversity in scale, scope, organization, and longevity of family firms, and shows differences through time in different societies and between families. The article also demonstrates the strong path dependency of family firm development, with change (or lack of it) underpinned by the foundations of the past. The article further explores research which compares the performance of family firms with non-family firms and this highlights the potential policy implications of family business research.
Many excellent surveys of the literature on business growth and survival have appeared in the last decade. This article focuses on small firm literature on survival and growth, drawing on largely non-size-specific surveys only when the intersection between their subject matter and that of small firm growth and survival is significant. The focus is moreover primarily on testable or tested theories, implying a neglect of theory, however intrinsically interesting, which offers no (immediately) testable or tested implications. It is important to note at the outset that the industrial economics literature in general has a rather disparate definition of the term ‘small firm’ from the small business literature as located in the small business journals.