Towards an evolutionary model of the entrepreneurial financing process: insights from biotechnology startups
AbstractUsing multiple longitudinal case studies of young biotechnology firms, we study differences in the financing process between high and low performing firms. Findings suggest that initial differences in the specialization of the investors with whom entrepreneurs affiliate early on, affect the ease with which firms attract (specialized) follow-on financing and firm performance. We demonstrate the role of the social context in shaping initial financing outcomes, as entrepreneurs limit their search for financing to one or a few investors with whom they have pre-existing ties. Additionally, our research provides a dynamic view of the financing process. We identify isolating mechanisms, including entrepreneurial learning and homophily and network considerations in investor syndication, which limit entrepreneurs when trying to adopt successful financing strategies implemented by competitors later on. A core contribution is that we theorize on evolutionary processes in the financing process. This new perspective advances our knowledge on dynamics in the financing process and opens multiple avenues for future research.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Vlerick Leuven Gent Management School in its series Vlerick Leuven Gent Management School Working Paper Series with number 2008-09.
Length: 40 pages
Date of creation: 20 Jul 2008
Date of revision:
entrepreneurship; new venture finance; financing process; venture capital; performance;
Other versions of this item:
- T. Vanacker & S. Manigart & M. Meuleman, 2008. "Towards an Evolutionary Model of the Entrepreneurial Financing Process: Insights from Biotechnology Startups," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/522, Ghent University, Faculty of Economics and Business Administration.
- NEP-ALL-2008-08-31 (All new papers)
- NEP-ENT-2008-08-31 (Entrepreneurship)
- NEP-EVO-2008-08-31 (Evolutionary Economics)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Isabelle Vandenbroere).
If references are entirely missing, you can add them using this form.