Institutional drivers of born-public ventures

Purpose - The purpose of this paper is to identify and theoretically delineate the government-based institutional drivers of “born-public ventures” – ventures that seek to fulfill government contracts or sell goods and services to government agencies. Design/methodology/approach - The authors develop theory that explains how the government influences the pursuit of public sector opportunities, thereby influencing where new ventures expend their finite effort. Specifically, the authors use institutional theory to delineate the regulatory, cognitive, and normative drivers of born-public ventures. In doing so, the authors highlight both the government’s regulative and non-regulative institutional influences. Finally, the authors present a research agenda to encourage further understanding of this important phenomenon. Findings - The authors find that the government can affect the allocation of finite entrepreneurial effort toward or away from public sector opportunities by using regulative, normative, and cognitive institutional forces. This influence is important because entrepreneurship targeted at the public sector likely has broad implications for the economy and society as a whole. Originality/value - Despite recent attention to questions about entrepreneurial allocation, scholars have largely overlooked the importance of why some new ventures choose to allocate their effort toward public sector opportunities. Given the growing number of public sector opportunities and the potential economic and societal implications associated with pursuing these opportunities, research is needed to understand this allocative choice. By introducing the phenomenon of born-public ventures and outlining important research questions, this theoretical paper provides the foundation for further work on this topic.