Towards an evolutionary model of the entrepreneurial financing process: insights from biotechnology startups
Using 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.
|Date of creation:||20 Jul 2008|
|Contact details of provider:|| Postal: Reep 1, 9000 Gent|
Phone: +32 9 210 98 99
Fax: +32 9 210 97 00
Web page: http://www.vlerick.com
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:vlg:vlgwps:2008-09. See general 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.