Session 174

Social Networks & Entrepreneurship

Track K

Date: Tuesday, October 9, 2012


Time: 15:45 – 17:00

Common Ground

Room: Club H


  • Steven Floyd, University of Massachusetts Amherst

Title: “Tigerblood”: Availability Cascades, Social Media, and the Environment of the Entrepreneurial Process


  • Brad Greenwood, University of Maryland
  • Anand Gopal, University of Maryland

Abstract: Availability cascades are defined as large increases in public discourse on events or topics which give rise to the ubiquitous use of the availability heuristic. We study the impact of availability cascades originating from two sources, the print and social media, in the context of IT entrepreneurship. Our results show the effect of both the social media cascade as well as the print cascade on firm founding and first-round funding. Additionally, we show that the social media cascade mediates the relationship between the print cascade and firm founding / funding. Our work here is the first to show how various media may interact in influencing entrepreneurial decisions and also provides evidence on how social media plays an increasingly important role in agenda-setting in the economy.

Title: Advice Networks of Discovery and Creation Entrepreneurs


  • John Upson, University of West Georgia
  • Naga Lakshmi Damaraju, Indian School of Business
  • Jon Anderson, University of West Georgia
  • Jay Barney, University of Utah

Abstract: Entrepreneurship research is dominated by two theories of opportunity formation: discovery and creation. The specific entrepreneurial actions leading to identification and exploitation of each likely differ. We explore entrepreneurs’ alignment of human resources, and specifically advice networks. Extant research favors diversity within advice networks as a source of idea generation and pursuit. However, we argue that diversity may not always be advantageous. Drawing from literature on entrepreneurial opportunities, social network theory, and cognitive psychology, we suggest that discovery entrepreneurs seek similarity in their networks whereas creation entrepreneurs seek diversity in their advice networks.

Title: Consolidating Views on the Ideal Social Network Structure for Innovation: Recent Advances in Entrepreneurship Literature


  • Mitch Angle, Ohio State University
  • Sharon Alvarez, University of Denver
  • Jay Barney, University of Utah

Abstract: Social network theory has divergent views on the ideal way to develop innovation. One view advocates the use of sparse networks and structural holes. In this view, innovation is viewed as the result of the combination of unique ideas. A second view advocates the use of dense or cohesive networks. In this case, repeated interaction and the exchange of ideas leads to innovation. This paper proposes that these views can be consolidated nicely into the discovery and creation views recently gaining interests in the entrepreneurship literature.

Title: Serial Entrepreneurs: The Influence of Venture Capitalists on Organizational Learning from Experience


  • Jeffrey Martin, University of Alabama

Abstract: The purpose of this paper is to advance understanding of organizational learning by exploring the antecedents, contextual, organizational, and individual level factors that affect the exploitation of learning and innovation in new ventures. Specifically, this paper explores the affordances and constraints that venture capital funding can have on learning and innovation in new ventures. Much of the literature related to the influence of venture capital on new ventures emphasizes positive learning aspects like access to expertise and networks. However, this study finds that venture capital funding can have a negative effect on the capacity of a new venture to learn from its experience.

Title: The More is Always The Better?: Effects of Entrepreneurial Firms’ Social Relation on Performance


  • Yujin Back, Korea University
  • Dae-il Nam, Korea University

Abstract: The more is the better? Or, too much is as bad as too little? Using a sample of all firms which went through an IPO during 2001-2003 in the U.S., we examine the relationship between social relations of entrepreneurial firms and IPO performance. Prior research has investigated that having relationships at the very early stage of life provides many advantages to entrepreneurial firms. To a certain point, we accept this well-known argument. However, we argue that too many relations could have detrimental consequences to new ventures. We introduce possible negative mechanisms of social relations and test the effect of immoderate social relations on their performance. We expect that social relations of entrepreneurial firms will have an inverted U-shaped relationship with performance.

Title: VC Network Resources and Portfolio Firms\' Alliance Formation


  • Xiaodan Wang, Western Michigan University
  • William Wan, City University of Hong Kong
  • G. T. Lumpkin, University of Oklahoma

Abstract: Many startups are eager to form alliances to reduce resource constraint and increase visibility and status. Although research has suggested that affiliation with a VC firm enhances alliance formation by a portfolio firm, the primary focus centers on the role of the lead VC firm only; little attention has been paid to the informational advantages provided by VC syndication in terms of information volume, relevance and diversity. Furthermore, tie strength between VC firms and portfolio firms has not received adequate research attention in the literature. Therefore, this study examines the effects of compositional attributes of VC syndication on portfolio firms’ likelihood to form alliances, and the moderating effects of tie strength on such relationships. We use a sample of VC-backed startups to test the hypotheses.

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

Strategic Management Society