IDEAS home Printed from https://ideas.repec.org/a/kap/sbusec/v62y2024i1d10.1007_s11187-023-00753-7.html
   My bibliography  Save this article

Different outcomes for different founders? Local organizational sponsorship and entrepreneurial finance

Author

Listed:
  • Paige Clayton

    (Georgia Institute of Technology)

Abstract

While the literature on entrepreneurial support organizations (ESOs) proliferates, we still do not understand whether local ESOs benefit some founders more than others. Drawing on organizational sponsorship and inclusive ecosystems literatures, this paper empirically examines whether founder characteristics of gender, immigrant, and racial minority group membership moderate the relationship between participation in different types of ESO services (incubator, mentoring, and education programs) and funding received from state, federal, and venture capital (VC) sources. Relying on a detailed database of life sciences firms founded in North Carolina’s Research Triangle region, the paper uncovers how funding outcomes differ depending on the funding source and the moderating ESO and founder traits. The paper concludes with practical implications for how women, immigrant, and minority founders may be better supported by ESOs for broader, inclusive ecosystem building.

Suggested Citation

  • Paige Clayton, 2024. "Different outcomes for different founders? Local organizational sponsorship and entrepreneurial finance," Small Business Economics, Springer, vol. 62(1), pages 23-62, January.
    • Handle: RePEc:kap:sbusec:v:62:y:2024:i:1:d:10.1007_s11187-023-00753-7
    DOI: 10.1007/s11187-023-00753-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11187-023-00753-7
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11187-023-00753-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zarutskie, Rebecca, 2010. "The role of top management team human capital in venture capital markets: Evidence from first-time funds," Journal of Business Venturing, Elsevier, vol. 25(1), pages 155-172, January.
    2. Christina Theodoraki & Karim Messeghem & Mark P. Rice, 2018. "A social capital approach to the development of sustainable entrepreneurial ecosystems: an explorative study," Small Business Economics, Springer, vol. 51(1), pages 153-170, June.
    3. Timothy Bates & William D. Bradford & Robert Seamans, 2018. "Minority entrepreneurship in twenty-first century America," Small Business Economics, Springer, vol. 50(3), pages 415-427, March.
    4. Bird, Miriam & Wennberg, Karl, 2016. "Why family matters: The impact of family resources on immigrant entrepreneurs' exit from entrepreneurship," Journal of Business Venturing, Elsevier, vol. 31(6), pages 687-704.
    5. Robert Huggins & Piers Thompson, 2014. "A Network-based view of regional growth," Journal of Economic Geography, Oxford University Press, vol. 14(3), pages 511-545.
    6. Daniel Erian Armanios & Charles E. Eesley & Jizhen Li & Kathleen M. Eisenhardt, 2017. "How entrepreneurs leverage institutional intermediaries in emerging economies to acquire public resources," Strategic Management Journal, Wiley Blackwell, vol. 38(7), pages 1373-1390, July.
    7. Greg Schrock & Nichola Lowe, 2021. "Inclusive innovation editorial: The promise of inclusive innovation," Local Economy, London South Bank University, vol. 36(3), pages 181-186, May.
    8. Roche, Maria P. & Conti, Annamaria & Rothaermel, Frank T., 2020. "Different founders, different venture outcomes: A comparative analysis of academic and non-academic startups," Research Policy, Elsevier, vol. 49(10).
    9. Michael W-P Fortunato & Theodore Alter, 2015. "Community entrepreneurship development: an introduction," Community Development, Taylor & Francis Journals, vol. 46(5), pages 444-455, December.
    10. Chreim, Samia & Spence, Martine & Crick, David & Liao, Xiaolu, 2018. "Review of female immigrant entrepreneurship research: Past findings, gaps and ways forward," European Management Journal, Elsevier, vol. 36(2), pages 210-222.
    11. Michael S. Dahl & Olav Sorenson, 2012. "Home Sweet Home: Entrepreneurs' Location Choices and the Performance of Their Ventures," Management Science, INFORMS, vol. 58(6), pages 1059-1071, June.
    12. Robert Kloosterman & Joanne Van Der Leun & Jan Rath, 1999. "Mixed Embeddedness: (In)formal Economic Activities and Immigrant Businesses in the Netherlands," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 23(2), pages 252-266, June.
    13. Mark Egan & Gregor Matvos & Amit Seru, 2022. "When Harry Fired Sally: The Double Standard in Punishing Misconduct," Journal of Political Economy, University of Chicago Press, vol. 130(5), pages 1184-1248.
    14. Shiri Breznitz, 2011. "Improving or Impairing? Following Technology Transfer Changes at the University of Cambridge," Regional Studies, Taylor & Francis Journals, vol. 45(4), pages 463-478.
    15. Xaver Neumeyer & Susana C. Santos & António Caetano & Pamela Kalbfleisch, 2019. "Entrepreneurship ecosystems and women entrepreneurs: a social capital and network approach," Small Business Economics, Springer, vol. 53(2), pages 475-489, August.
    16. Robert Fairlie & Alicia Robb, 2009. "Gender differences in business performance: evidence from the Characteristics of Business Owners survey," Small Business Economics, Springer, vol. 33(4), pages 375-395, December.
    17. Pierre Azoulay & Benjamin F. Jones & J. Daniel Kim & Javier Miranda, 2022. "Immigration and Entrepreneurship in the United States," American Economic Review: Insights, American Economic Association, vol. 4(1), pages 71-88, March.
    18. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    19. Amezcua, Alejandro & Ratinho, Tiago & Plummer, Lawrence A. & Jayamohan, Parvathi, 2020. "Organizational sponsorship and the economics of place: How regional urbanization and localization shape incubator outcomes," Journal of Business Venturing, Elsevier, vol. 35(4).
    20. Xi Huang & Cathy Yang Liu, 2019. "Immigrant Entrepreneurship and Economic Development," Journal of the American Planning Association, Taylor & Francis Journals, vol. 85(4), pages 564-584, October.
    21. Juanita Gonzalez-Uribe & Michael Leatherbee, 2018. "The Effects of Business Accelerators on Venture Performance: Evidence from Start-Up Chile," The Review of Financial Studies, Society for Financial Studies, vol. 31(4), pages 1566-1603.
    22. Howell, Sabrina T. & Nanda, Ramana, 2024. "Networking Frictions in Venture Capital, and the Gender Gap in Entrepreneurship," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 59(6), pages 2733-2761, September.
    23. Erik Stam, 2015. "Entrepreneurial Ecosystems and Regional Policy: A Sympathetic Critique," European Planning Studies, Taylor & Francis Journals, vol. 23(9), pages 1759-1769, September.
    24. Martin, Bruce C. & McNally, Jeffrey J. & Kay, Michael J., 2013. "Examining the formation of human capital in entrepreneurship: A meta-analysis of entrepreneurship education outcomes," Journal of Business Venturing, Elsevier, vol. 28(2), pages 211-224.
    25. Janice Byrne & Salma Fattoum & Maria Cristina Diaz Garcia, 2019. "Role Models and Women Entrepreneurs: Entrepreneurial Superwoman Has Her Say," Journal of Small Business Management, Taylor & Francis Journals, vol. 57(1), pages 154-184, January.
    26. Laura Wolf-Powers & Marc Doussard & Greg Schrock & Charles Heying & Max Eisenburger & Stephen Marotta, 2017. "The Maker Movement and Urban Economic Development," Journal of the American Planning Association, Taylor & Francis Journals, vol. 83(4), pages 365-376, October.
    27. Iacus, Stefano & King, Gary & Porro, Giuseppe, 2009. "cem: Software for Coarsened Exact Matching," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 30(i09).
    28. Matthew Blackwell & Stefano Iacus & Gary King & Giuseppe Porro, 2009. "cem: Coarsened exact matching in Stata," Stata Journal, StataCorp LP, vol. 9(4), pages 524-546, December.
    29. Elizabeth Lyons & Laurina Zhang, 2017. "The Impact of Entrepreneurship Programs on Minorities," American Economic Review, American Economic Association, vol. 107(5), pages 303-307, May.
    30. Sandy Yu, 2020. "How Do Accelerators Impact the Performance of High-Technology Ventures?," Management Science, INFORMS, vol. 66(2), pages 530-552, February.
    31. Ron Adner & Constance E. Helfat, 2003. "Corporate effects and dynamic managerial capabilities," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 1011-1025, October.
    32. François Neville & Juanita Kimiyo Forrester & Jay O'Toole & Allan Riding, 2018. "‘Why Even Bother Trying?’ Examining Discouragement among Racial†Minority Entrepreneurs," Journal of Management Studies, Wiley Blackwell, vol. 55(3), pages 424-456, May.
    33. Mary Donegan & Allison Forbes & Paige Clayton & Alyse Polly & Maryann Feldman & Nichola Lowe, 2019. "The tortoise, the hare, and the hybrid: effects of prior employment on the development of an entrepreneurial ecosystem," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(4), pages 899-920.
    34. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2011. "Multivariate Matching Methods That Are Monotonic Imbalance Bounding," Journal of the American Statistical Association, American Statistical Association, vol. 106(493), pages 345-361.
    35. Elizabeth Lyons & Laurina Zhang, 2018. "Who does (not) benefit from entrepreneurship programs?," Strategic Management Journal, Wiley Blackwell, vol. 39(1), pages 85-112, January.
    36. Susan Marlow & Maura McAdam, 2012. "Analyzing the Influence of Gender upon High–Technology Venturing within the Context of Business Incubation," Entrepreneurship Theory and Practice, , vol. 36(4), pages 655-676, July.
    37. Paige Clayton & Mary Donegan & Maryann Feldman & Allison Forbes & Nichola Lowe & Alyse Polly, 2019. "Local Prior Employment and Ecosystem Dynamics," ILR Review, Cornell University, ILR School, vol. 72(5), pages 1182-1199, October.
    38. Candida Brush & Linda F. Edelman & Tatiana Manolova & Friederike Welter, 2019. "A gendered look at entrepreneurship ecosystems," Small Business Economics, Springer, vol. 53(2), pages 393-408, August.
    39. Lisa D. Cook & Matt Marx & Emmanuel Yimfor, 2022. "Funding Black High-Growth Startups," NBER Working Papers 30682, National Bureau of Economic Research, Inc.
    40. Feldman, Maryann & Lowe, Nichola, 2015. "Triangulating regional economies: Realizing the promise of digital data," Research Policy, Elsevier, vol. 44(9), pages 1785-1793.
    41. Michael Schwartz, 2011. "Incubating an Illusion? Long‐Term Incubator Firm Performance after Graduation," Growth and Change, Wiley Blackwell, vol. 42(4), pages 491-516, December.
    42. Shiri M. Breznitz & Paige A. Clayton & Daniela Defazio & Kimberley R. Isett, 2018. "Have you been served? The impact of university entrepreneurial support on start-ups’ network formation," The Journal of Technology Transfer, Springer, vol. 43(2), pages 343-367, April.
    43. Sari Pekkala Kerr & William R. Kerr, 2019. "Immigrant Networking and Collaboration: Survey Evidence from CIC," NBER Chapters, in: The Roles of Immigrants and Foreign Students in US Science, Innovation, and Entrepreneurship, pages 173-205, National Bureau of Economic Research, Inc.
    44. Timothy Bates & Alicia Robb, 2014. "Small-business viability in America’s urban minority communities," Urban Studies, Urban Studies Journal Limited, vol. 51(13), pages 2844-2862, October.
    45. Kaveh Moghaddam & Alexandre Aidov & Charles DuVal & Sara Azarpanah, 2017. "High-growth entrepreneurial firm funding: a qualitative study of native-born and immigrant entrepreneurs," Venture Capital, Taylor & Francis Journals, vol. 19(1-2), pages 75-94, January.
    46. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2012. "Causal Inference without Balance Checking: Coarsened Exact Matching," Political Analysis, Cambridge University Press, vol. 20(1), pages 1-24, January.
    47. Avnimelech, Gil & Rechter, Eyal, 2023. "How and why accelerators enhance female entrepreneurship," Research Policy, Elsevier, vol. 52(2).
    48. Nicole E. Peterman & Jessica Kennedy, 2003. "Enterprise Education: Influencing Students’ Perceptions of Entrepreneurship," Entrepreneurship Theory and Practice, , vol. 28(2), pages 129-144, March.
    49. Colin Mason & Richard Harrison, 2006. "After the exit: Acquisitions, entrepreneurial recycling and regional economic development," Regional Studies, Taylor & Francis Journals, vol. 40(1), pages 55-73.
    50. John C. Dencker & Marc Gruber & Sonali K. Shah, 2009. "Pre-Entry Knowledge, Learning, and the Survival of New Firms," Organization Science, INFORMS, vol. 20(3), pages 516-537, June.
    51. Birdthistle, Naomi & Eversole, Robyn & Walo, Megerssa, 2022. "Creating an inclusive entrepreneurial ecosystem for women entrepreneurs in a rural region," Journal of Business Venturing Insights, Elsevier, vol. 18(C).
    52. Gimenez-Fernandez, Elena M. & Sandulli, Francesco D. & Bogers, Marcel, 2020. "Unpacking liabilities of newness and smallness in innovative start-ups: Investigating the differences in innovation performance between new and older small firms," Research Policy, Elsevier, vol. 49(10).
    53. Sophie Calder-Wang & Paul A. Gompers & Kevin Huang, 2021. "Diversity and Performance in Entrepreneurial Teams," NBER Working Papers 28684, National Bureau of Economic Research, Inc.
    54. Timothy Bates & Magnus Lofstrom & Lisa J. Servon, 2011. "Why Have Lending Programs Targeting Disadvantaged Small Business Borrowers Achieved So Little Success in the United States?," Economic Development Quarterly, , vol. 25(3), pages 255-266, August.
    55. Ben Spigel & Fumi Kitagawa & Colin Mason, 2020. "A manifesto for researching entrepreneurial ecosystems," Local Economy, London South Bank University, vol. 35(5), pages 482-495, August.
    56. Xaver Neumeyer & Susana C. Santos & Michael H. Morris, 2019. "Who is left out: exploring social boundaries in entrepreneurial ecosystems," The Journal of Technology Transfer, Springer, vol. 44(2), pages 462-484, April.
    57. Becker-Blease, John R. & Sohl, Jeffrey E., 2007. "Do women-owned businesses have equal access to angel capital?," Journal of Business Venturing, Elsevier, vol. 22(4), pages 503-521, July.
    58. Yasuyuki Motoyama & Susan Clark Muntean & Karren Knowlton & Banu Ozkazanc-Pan, 2021. "Causes of the gender divide within entrepreneurship ecosystems," Local Economy, London South Bank University, vol. 36(3), pages 187-204, May.
    59. Dabić, Marina & Vlačić, Bozidar & Paul, Justin & Dana, Leo-Paul & Sahasranamam, Sreevas & Glinka, Beata, 2020. "Immigrant entrepreneurship: A review and research agenda," Journal of Business Research, Elsevier, vol. 113(C), pages 25-38.
    60. Teresa Kroeger & Graham Wright, 2021. "Entrepreneurship and the Racial Wealth Gap: The Impact of Entrepreneurial Success or Failure on the Wealth Mobility of Black and White Families," Journal of Economics, Race, and Policy, Springer, vol. 4(3), pages 183-195, September.
    61. Trevor Jones & Monder Ram & Paul Edwards & Alex Kiselinchev & Lovemore Muchenje, 2014. "Mixed embeddedness and new migrant enterprise in the UK," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 26(5-6), pages 500-520, August.
    62. Yasuyuki Motoyama & Karren Knowlton, 2016. "From resource munificence to ecosystem integration: the case of government sponsorship in St. Louis," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(5-6), pages 448-470, May.
    63. Benjamin L. Hallen & Susan L. Cohen & Christopher B. Bingham, 2020. "Do Accelerators Work? If So, How?," Organization Science, INFORMS, vol. 31(2), pages 378-414, March.
    64. Timothy Bates & Alicia Robb, 2016. "Impacts of Owner Race and Geographic Context on Access to Small-Business Financing," Economic Development Quarterly, , vol. 30(2), pages 159-170, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Clayton, Paige, 2024. "Mentored without incubation: Start-up survival, funding, and the role of entrepreneurial support organization services," Research Policy, Elsevier, vol. 53(4).
    2. Brian J. Bergman & Jeffery S. McMullen, 2022. "Helping Entrepreneurs Help Themselves: A Review and Relational Research Agenda on Entrepreneurial Support Organizations," Entrepreneurship Theory and Practice, , vol. 46(3), pages 688-728, May.
    3. Pramendra Singh Tank, 2023. "Unlocking the Power of Accelerators: The Crucial Role of Institutions in Boosting New Venture Performance," IIMA Working Papers WP 2023-04-04, Indian Institute of Management Ahmedabad, Research and Publication Department.
    4. Farzana Chowdhury & David B. Audretsch, 2024. "Paradoxes of accelerator programs and new venture performance: Do varieties of experiences make a difference?," Small Business Economics, Springer, vol. 62(1), pages 381-409, January.
    5. Raushan Aman & Petri Ahokangas & Xiaotian Zhang, 2021. "Migrant women entrepreneurs and entrepreneurial ecosystems during an external shock: a case study from the healthcare sector in Kazakhstan," Asian Business & Management, Palgrave Macmillan, vol. 20(4), pages 518-548, September.
    6. Haifeng Qian & Zoltan J. Acs, 2023. "Entrepreneurial Ecosystems and Economic Development Policy," Economic Development Quarterly, , vol. 37(1), pages 96-102, February.
    7. Yasuyuki Motoyama & Susan Clark Muntean & Karren Knowlton & Banu Ozkazanc-Pan, 2021. "Causes of the gender divide within entrepreneurship ecosystems," Local Economy, London South Bank University, vol. 36(3), pages 187-204, May.
    8. Paige Clayton & Maryann Feldman & Benjamin Montmartin, 2024. "Entrepreneurial finance and regional ecosystem emergence," Small Business Economics, Springer, vol. 62(4), pages 1493-1521, April.
    9. Avnimelech, Gil & Rechter, Eyal, 2023. "How and why accelerators enhance female entrepreneurship," Research Policy, Elsevier, vol. 52(2).
    10. Daniel Prokop & Piers Thompson, 2023. "Defining networks in entrepreneurial ecosystems: the openness of ecosystems," Small Business Economics, Springer, vol. 61(2), pages 517-538, August.
    11. Ewens, Michael, 2022. "Race and Gender in Entrepreneurial Finance," SocArXiv djf8z, Center for Open Science.
    12. Leduc, Elisabeth & Tojerow, Ilan, 2020. "Subsidizing Domestic Services as a Tool to Fight Unemployment: Effectiveness and Hidden Costs," IZA Discussion Papers 13544, Institute of Labor Economics (IZA).
    13. Matteo Aquilina & Giulio Cornelli & Marina Sanchez del Villar, 2024. "Regulation, information asymmetries and the funding of new ventures," BIS Working Papers 1162, Bank for International Settlements.
    14. Lauren Lanahan & Daniel Armanios, 2018. "Does More Certification Always Benefit a Venture?," Organization Science, INFORMS, vol. 29(5), pages 931-947, October.
    15. Sara Pavone & Elena Ragazzi & Lisa Sella, 2015. "Sostenere le imprese agro-industriali in Piemonte: un?analisi controfattuale," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2015(3 Suppl.), pages 129-143.
    16. Davidson Heath & Giorgo Sertsios, 2022. "Profitability and Financial Leverage: Evidence from a Quasi-Natural Experiment," Management Science, INFORMS, vol. 68(11), pages 8386-8410, November.
    17. Khanna, Rajat, 2021. "Aftermath of a tragedy: A star's death and coauthors’ subsequent productivity," Research Policy, Elsevier, vol. 50(2).
    18. Rocha, Augusto & Brown, Ross & Mawson, Suzanne, 2021. "Capturing conversations in entrepreneurial ecosystems," Research Policy, Elsevier, vol. 50(9).
    19. Gustavsson Tingvall, Patrik & Videnord, Josefin, 2017. "Regional Effects of Publicly Sponsored R&D Grants on SME Performance," Ratio Working Papers 289, The Ratio Institute.
    20. Corral, Leonardo & Henderson, Heath & Miranda, Juan José, 2016. "Evidence from a Natural Experiment on the Development Impact of Windfall Gains: The Camisea Fund in Peru," IDB Publications (Working Papers) 7520, Inter-American Development Bank.

    More about this item

    Keywords

    Entrepreneurial support organization; Organizational sponsorship; Woman founder; Immigrant founder; Minority founder; Inclusive entrepreneurial ecosystem;
    All these keywords.

    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:sbusec:v:62:y:2024:i:1:d:10.1007_s11187-023-00753-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.