New venture emergence as a process of stakeholder identification and enrolment - 31 Jan 2023

Paper title and abstract

A quest for resources: New venture emergence as a process of stakeholder identification and enrolment

Abstract:

Venture emergence is closely tied to the availability of tangible and intangible resource from a range of resource providers, such as financial capital, revenue or endorsements from regulatory bodies (Baker & Nelson 2005; Fisher, Kotha & Lahiri 2015). Founders’ social and human capital is a decisive factor to gain access to resources (Davidsson & Honig 2003). Although such link is well established, attention to the process of ‘how’ entrepreneurs gain access remains limited. In a rare example, Hallen and Eisenhardt (2012) identified strategies entrepreneurs employed to secure venture capital, demonstrating success was closely aligned with founders’ strong prior social network. Recognising challenges to gain resources due to distinct, and often competing, expectations of different resource providers (Fisher et al. 2015), research only recently started considering the role of stakeholders (Mitchell et al. 2021). Whilst the relation of stakeholders in established firms is well established (Mitchell, Agle & Wood 1997), the formation of stakeholders has only recently been explored (Alvarez & Sachs 2022). Mitchell et al. (2021)’s distinction of stakeholder identification from stakeholder enrolment offers a conceptual basis to investigate “how do stakeholder identification and enrolment facilitate gaining access to resources and shape venture emergence”, a research question we are heeding.

To address the research question, we focus on the attempt of entrepreneurs to identify and select stakeholders to progress their nascent ventures, following principles of a multi-case research design (Eisenhardt 1989). A commercial accelerator program (SmartInc) provided an ideal setting to recruitment entrepreneurs in pursuit of nascent ventures. To ensure cross-case comparison, six ventures were selected from the same cohort, each at a similar stage of venture emergence. Following a longitudinal research design, progress of each venture was attained from multiple data sources, primarily from interviews held frequently with founders (n = 60). Interviews with SmartInc’s mentor (n = 8) provided an opportunity to gain further details on and occasionally corroborate a venture’s progress. Sampling provided a quasi-natural experimental setting, as the trajectory of the six ventures corresponded with common outcomes associated with venture emergence: shut down (4x ventures) and progression (2x ventures).

Our study has implications for extant theory. We theorize the relation of venture emergence and stakeholder formation. Whilst stakeholders are recognised as resource providers (Davidsson & Honig 2003; Fisher et al. 2015), our study identifies strategies which explicate the coevolution of venture emergence and the formation of stakeholders, which advances a burgeoning stream of research which remains largely conceptual (Alvarez et al. 2020; Alvarez & Sachs 2021; Mitchell et al. 2021; for an exception, see Fisher et al. 2020; Hallen & Eisenhardt 2012). Our study advances a recent stream of work consider resource seeking as emergent (Reypens, Bacq & Milanov 2021; Vissa 2011, 2012) relaxing assumptions about strict rationality ascribed to networking behaviour (Davidsson & Honig 2003). In addition, our study elaborates on the relation of stakeholders positing their enrolment as enabling pivots, which contrasts recent insights (Hampel et al. 2020; McDonald & Gao 2019).

About Anna Jenkins

Dr Anna Jenkins studies the startup process, the activities and processes which entrepreneurs engage in to explain why some startups emerge successful and growing and others either stagnate or fail. She currently holds an ARC Discovery grant for this project where she is leading a project following the development and trajectories of startups for over five years. She is also leading a research project on the development of startup ecosystems where the research team is conducting a longitudinal ethnographic study on how startup ecosystems emerge.

She leads the health economics component of large inter-disciplinary  research project funded by the Australian Research Council on innovation in bio-medical imaging studying the development of precision medicines, the deployment of AI technologies and advances in regulatory affairs.

Her other area of expertise on how small business owners manage setbacks and failure. This stream of research focuses on how small business owners respond to failure, how they reduce the impact failure can have on their well-being, and the effectiveness of different coping strategies for their well-being and future employment.

This seminar represented an integrative and important part of the House of Innovation's strategy to build a research environment through engagement with prominent guests and their work.

This seminar was part of the Academic Seminar Series offered in cooperation with the Stockholm School of Entrepreneurship.