Session 157

Financing Entrepreneurial Ventures

Track K

Date: Sunday, October 7, 2012

 

Time: 15:15 – 16:30

Paper

Room: Terrace 2


Session Chair:

  • Elisa Alvarez-Garrido, University of South Carolina

Title: Differentiating Who Do You Know and Who Do You Count on in Entrepreneurs\' Venture Fundraising

Authors

  • Han Jiang, University of Arizona

Abstract: To date, network research has seldom attempted to differentiate two potentially distinct notions—having networks and using networks. In this research, we shed light on the differentiation between “having a tie” and “using a tie” by showing that entrepreneurs may not use all social ties they have with investors in venture fundraising and unveiling the determination mechanism of this difference drawing on expectancy theory. We find that the higher a new venture’s quality, the more likely that its entrepreneurs would use their entrepreneur-investor ties in fundraising. Plus, this relationship is strengthened by the strength of entrepreneur-investor ties, such that when venture quality is low, entrepreneurs are more hesitating to use social ties to raise fund from investors with which they are strongly connected.

Title: Effects of Uncertainty on Venture Capitalists’ Investment Trajectories in the Clean Energy Sector

Authors

  • Anu Wadhwa, Imperial College London
  • Xin Yao, University of Colorado-Boulder
  • Sanjay Jain, Santa Clara University
  • Antoaneta Petkova, San Francisco State University

Abstract: This study investigates the impact of different types of uncertainties on the evolution of entrepreneurial action, using VC firms’s entry into the emerging clean energy sector. Using the real options lens, we examine the effects of exogenous uncertainty and VC resources and capabilities on VC diversification in clean energy subsectors. We test our hypotheses using longitudinal data on 171 VCs that entered the clean energy sector between 1990-2008. We find that some types of environmental uncertainty are positively related with VC diversification and that the relationship between environmental uncertainty and diversification is weakened by VC capabilities. Our study contributes to entrepreneurship theory and practice by highlighting the manner in which VC firms develop industry specific capabilities in the face of uncertainty.

Title: The Contribution of Seasoned Venture Capital Firms to Basic and Applied Science: The Role of IP Regimes

Authors

  • Elisa Alvarez-Garrido, University of South Carolina

Abstract: The globalization of Venture Capital (VC) investments raises the question of how VCs impact innovation in countries with weaker Intellectual Property (IP) protection. Do more seasoned VCs foster innovation in weaker IP countries? And if so, do they foster applied research equally to basic research? Using a global sample of 1,025 VC-backed biotechnology startup (575 US ventures, and 450 from 25 additional countries), I test whether the effect of VC Experience on patents and publications changes with the strength of the IP institutions. I find that when IP protection is weak, experienced VCs (a) foster patenting outcomes more, and (b) scientific publications less, than in strong IP environments. Overall, this paper studies the contribution of VC experience to innovation across different institutional environments.

Title: The Liability of Breadth? Biased Evaluations of Experience Breadth in Threatening vs. Opportunistic Environments for New Ventures

Authors

  • Emily Block, University of Notre Dame
  • Fadel Matta, Michigan State University
  • Adam Steinbach, University of South Carolina

Abstract: Although investors highly value experienced founding teams when evaluating new ventures, most research has focused on the positive influence of experience depth for such evaluations. Much less is understood about how investors evaluate the breadth of experience a founding team brings to a new venture. In this research we draw from psychological research on the effects of cognitive framing to argue that potential investors place very different values on experience breadth in different environments. Specifically, we argue that in environments that are perceived as threatening, experience breadth is viewed by investors as a liability that inhibits focus and execution. In opportunistic environments we argue that experience breadth is viewed as a valuable resource.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 126: Entrepreneurship & Stakeholders - The Future Research Agenda
Sun: 09:30 – 10:45
Session 127: Teaching Strategic Entrepreneurship
Sun: 11:15 – 12:30
Session 128: Poverty, Informal Firms & Strategic Entrepreneurship
Sun: 15:15 – 16:30
Session 157: Financing Entrepreneurial Ventures
Session 161: Entrepreneurial Growth
Mon: 08:00 – 09:15
Session 158: Corporate Venture Capital
Session 175: Austrian Economics & Creative Destruction
Mon: 09:30 – 10:45
Session 178: Institutional Theory & New Ventures
Session 180: Pushing the Bounds of Agency Theory
Mon: 13:30 – 14:45
Session 159: Exploration, Exploitation, and Ambidexterity
Session 169: Spinoffs, Spinouts, and Labor Mobility
Mon: 16:30 – 17:45
Session 162: New Venture Strategy & Innovation
Session 163: Cognitive Perspectives
Tue: 08:00 – 09:15
Session 164: IPOs
Session 170: Emerging Markets
Tue: 11:00 – 12:15
Session 160: Corporate Venturing and Intrapreneurship
Session 179: Social Networks within and across Firms
Tue: 14:15 – 15:30
Session 166: Institutional Aspects of Entrepreneurship
Session 167: Firm Boundaries
Tue: 15:45 – 17:00
Session 174: Social Networks & Entrepreneurship
Session 176: Value Capture & Appropriability
Tue: 17:30 – 18:45
Session 168: Uncertainty, Ambiguity, and Sense-Making
Session 173: New Venture Creation


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