Session 173

New Venture Creation

Track K

Date: Tuesday, October 9, 2012

 

Time: 17:30 – 18:45

Paper

Room: Club D


Session Chair:

  • Michael Roach, Cornell University

Title: Racial Differences in Financial Capital Injections among New Businesses

Authors

  • Alicia Robb, Ewing Marion Kauffman Foundation
  • Robert Fairlie, University of California, Santa Cruz
  • David Robinson, Duke University

Abstract: This paper uses new panel data from the Kauffman Firm Survey to examine racial differences in the incidence and determinants of financial capital use among young firms. We find a heavy reliance on owner's equity at startup that declines substantially in subsequent years, whereas the reliance on outsider debt remains as high in subsequent years as at the point of startup. We find that black-owned businesses face persistent difficulty in accessing external capital markets. Regression analyses indicate that racial disparities in the amounts and types of early financing between blacks and whites do not entirely disappear after controlling for differences in credit quality, human capital, and firm characteristics. These findings are robust to the inclusion of owner wealth, which was added to the KFS questionnaire in 2008.

Title: Rationale of Original Sin: A Behavioral Model of New Ventures\' Opportunism

Authors

  • Han Jiang, University of Arizona
  • Albert Cannella Jr, Texas A&M University

Abstract: Prior opportunism research has seldom examined opportunism determination. In this study we developed a behavioral model to unveil the determination mechanism of new ventures’ opportunism. We found that entrepreneurs may use opportunism as risky yet beneficial strategic alternatives. If new ventures suffer from resource scarcity, low legitimacy and volatile environment, which lead to high mortality risk, entrepreneurs may perceive the loss of venture failure as fixed. Out of their loss aversion, they may be driven to take risk and use opportunism to avoid the fixed venture failure loss. However, if entrepreneurs largely use their managerial social capital in their new ventures, they may personally bear the costs and risks of these opportunistic behaviors, and be more concerned to use opportunism to save their new ventures.

Title: The Influence of Founding Team and Consultant Knowledge on New Venture Launch Speed

Authors

  • Michael Devaughn, University of St. Thomas

Abstract: Using a sample of start-ups in the U. S. banking industry, we hypothesize that the experience of internal founding teams and external industry consultants will increase the speed of new venture launch. Our preliminary results suggest that prior shared experience on the founding team speeds up new venture launch while the use of start-up banking consultants delays it. Finally, we contribute to both the consulting and entrepreneurship literatures by clearly and objectively defining the impact of an understudied outside actor in the new venture, the consultant, on a unique entrepreneurial event, the launch speed of a new venture.

Title: Who Wants to be a Founder, and Who Wants to Join One? The Entrepreneurial Intentions of Science & Engineering Phds

Authors

  • Michael Roach, Cornell University
  • Henry Sauermann, Georgia Institute of Technology

Abstract: While founders are a cornerstone of entrepreneurial activity, startups also rely critically on “joiners”, individuals drawn toward entrepreneurial ventures as employees rather than founders. Using a survey of 4,282 science and engineering PhDs, we find that 11% of respondents intend to be founders, while 45% intend to join startups but not as founders. Regression results demonstrate that founders and joiners exhibit similar “entrepreneurial” profiles compared to individuals not interested in entrepreneurship along individual characteristics such as preferences for wealth, risk, and commercialization, but differ in the influence of departmental norms and the role of possessing a technological opportunity. These findings have implications for individuals’ selection into entrepreneurial careers and suggest that individual, social, and opportunity factors all play different roles in shaping entrepreneurial intentions.

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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