Surviving the emotional rollercoaster called entrepreneurship: The role of emotion regulation

The entrepreneurial journey is often experienced as an emotional rollercoaster, but we know very little about how entrepreneurs can ride it most effectively to increase their ventures' chances of survival. We investigate how entrepreneurs' habitual use of cognitive reappraisal and expressive suppression – two well-established types of emotion regulation – impact on the likelihood of their venture surviving. Drawing on a sample of 183 technology ventures, we find that both regulation types are generally associated with a lower survival likelihood, but that these effects depend on the venture's performance. Our study contributes to the literatures on emotions and new venture survival in entrepreneurship and to the emotion regulation literature.     

Cognitive biases,risk perception,and venture formation: How individuals decide to start companies

Despite the high risk involved, thousands of individuals decide to start ventures. Past research, however, has found that entrepreneurs do not have a high-risk propensity, that is, a great willingness to knowingly take risks. This study, therefore, explores how individuals cope with the risks inherent in their decisions, and suggests that entrepreneurs may not perceive the riskiness of starting ventures.The study's findings suggest that risk perceptions may differ because certain types of cognitive biases lead individuals to perceive less risk. Cognitive biases are common types of mental shortcuts used to make judgments. This study examines three cognitive biases that previous research has suggested may lower risk perception. The first, overconfidence, refers to the failure to know the limits of one's knowledge. The second bias tested, the illusion of control, occurs when individuals overemphasize the extent to which their skill can increase performance in situations where chance plays a large part and skill is not necessarily the deciding factor. Because the individuals believe that they can control largely uncontrollable events, they also think they can accurately predict the outcome of the events. Finally, the third bias, the belief in the law of small numbers occurs when an individual uses a limited number of informational inputs (a small sample of information) to draw firm conclusions.This study's sample consisted of 191 students pursuing a Masters of Business Administration. The students' responses to a survey based on a case study regarding a decision to start a venture were examined. The survey included questions about the students' willingness to start the venture, their perception of the venture's riskiness, and the extent to which they exhibited cognitive biases in their decision processes.The study's findings tentatively suggest that individuals start ventures because they do not perceive the risks involved, and not because they knowingly accept high levels of risks. The belief in the law of small numbers lowered an individual's perceptions of a venture's riskiness, suggesting that some individuals draw firm conclusions from small samples. An illusion of control also decreased risk perception, suggesting that individuals starting ventures might not acknowledge that certain tasks, important to the venture's success, are beyond their control.Some argue that biases might be associated with venture failure. If this is the case, the very processes that increase the likelihood of starting a venture may actually decrease performance. Entrepreneurs may choose to minimize their biases by soliciting and paying heed to the advice of outsiders, or by using group decision-making techniques, such as devil's advocacy or dialectical inquiry.Others, however, suggest that early in the decision process, biases may be beneficial because they lower risk perception, which allows entrepreneurs to generate the commitment needed for success. Even if this is true, entrepreneurs should still institute processes to increase learning so the venture can adjust to unfolding realities and avoid any damage caused by initial misperceptions. Similarly, entrepreneurs need adequate safety nets in case their biases lead them to encounter unforeseen difficulties. The potential positive and negative effects of biases and perceiving low levels of risk suggest the importance of exploring this area further.     

Perceived risks and choices in entrepreneurs' new venture decisions

Though risk plays a central role in most entrepreneurial decision making, little empirical research has explicitly examined how the elements of risk, risk perceptions, and entrepreneurs' propensities to take risks influence choices among potentially risky entrepreneurial ventures. This experimental study asked a sample of entrepreneurs leading America's fastest growing firms to make choices among a series of hypothetical new ventures. The results indicate that such choices are influenced by the risks inherent in the new ventures, as evidenced by the pattern of outcomes anticipated in each venture, the entrepreneurs' differing perceptions of those risks, and differences in their personal propensities to take risks.The subjects in our sample of entrepreneurs tended not to choose ventures having a high degree of variability in their pattern of anticipated outcomes. This avoidance of outcome variability suggests that the sensitivity analyses commonly prescribed for examining new venture attractiveness may inhibit risk taking, and may deter potential investors from investing in their firms. New approaches to assessing and presenting new venture risk, other than the traditional best case/expected case/worst case approach, may be advisable, as well as sufficiently through market research to provide evidence of the degree to which market acceptance is likely for the venture's products or services.We also found an effect of differences in risk propensities among entrepreneurs on their new venture choices. This effect suggests not only that entrepreneurs should be wary of any biases they bring to their new venture decisions, but that prospective investors should consider the degree to which entrepreneurs in whom they choose to invest are well-matched to the investors' own risk-taking propensities.Finally, while our sample of entrepreneurs tended to shun high levels of variability in their new venture choices, they appeared willing to accept a considerable degree of hazard, or possible downside, in their new venture choices, presumably in pursuit of potentially significant gains. Entrepreneurs are advised to seek a clear understanding of the downside entailed in their proposed ventures, and develop strategies to mitigate the likelihood of adverse outcomes. Thus they will not jeopardize chances for near term success and attracting support of investors and others in later stages of the venture or in subsequent ventures.Our research did not attempt to examine how our subjects' choices would have played out in terms of performance, but the apparent biases which entrepreneurs' risk propensities bring to their assessment of proposed new ventures is a potentially important issue that merits further scrutiny. On one hand, such biases may lead to patterns of suboptimal decisions. On the other hand, our results suggest that investors should entrust their new venture investments to entrepreneurs whose risk propensities (and perhaps other personal characteristics) best match the needs of both the opportunity at hand and the investor's objectives. As many venture capitalists attest, the management of a proposed new venture should lie at the heart of their investment decision.     

Technology commercialization, incubator and venture capital, and new venture performance

This study examines the effects of technology commercialization, incubator and venture capital supports on new venture performance from the resource-based view. This study uses regression analysis to test the hypotheses in a sample of 122 new ventures. The findings highlight the role of technology commercialization as a mediator between organizational resources, innovative capabilities, and new venture performance. Also, the empirical evidence indicates that incubator and venture capital supports moderate the effects of technology commercialization on the performance of new ventures. Finally, this study discusses managerial implications and highlights future research directions.     

The entrepreneur's mode of entry: Business takeover or new venture start?

We extend the well-known occupational choice model of entrepreneurship by analyzing the mode of entry. Individuals can become entrepreneurs by taking over established businesses or starting up new ventures from scratch. We argue that the new venture creation mode is associated with higher levels of schooling whereas managerial experience, new venture start-up capital requirements and industry level risk promote the takeover mode. A sample of data on entrepreneurs from The Netherlands provides broad support for these hypotheses, and also bears out a prediction that entrepreneurs whose parents run a family firm tend to invest the least in schooling. We go on to discuss the implications for researchers, entrepreneurs and public policy makers.     

Missing the boat or sinking the boat: a study of new venture decision making

Taking two conceptualizations of risk, Dickson and Giglierano's [J. Mark. 50 (1986) 58] nautical analogy of entrepreneurial risk (sinking vs. missing the boat) to represent the likelihood of loss element of new venture risk, and March and Shapira's [Manage. Sci. 33 (1987) 1404] risk as hazard (boat size) to represent the magnitude of loss element of new venture risk, we investigated how two contextual factors, the suitability of entrepreneurs' skills and their sources of funds, and two individual differences factors, the entrepreneurs' risk propensities and their perceptions of risk, influence their new venture decision making. Metaphorically speaking, we found that most entrepreneurs would rather risk missing than sinking the boat, and that they preferred to pilot bigger craft than smaller ones. Perhaps surprisingly, our sample of highly successful entrepreneurs made relatively risk-averse choices, with 83% choosing either of the two ventures for which the chances for loss were lowest. We also found that the source of new venture funding—the entrepreneur's own money versus that of investors—influenced our subjects' choices between ventures whose chances for loss or gain differed. A similar effect was found for the entrepreneur's risk propensity. On the other hand, we found that the risk the entrepreneurs perceived in the choice set also influenced choices, but only where the magnitude of the new venture's potential gain or loss varied. When viewed in total, our study and results suggest a risk- and reward-based typology of new venture opportunities, one that may provide a conceptual foundation for future explorations of a variety of questions relevant for entrepreneurs and theorists alike.     

Identifying Performance Measures of Small Ventures—The Case of the Tourism Industry

Drawing on the goal theory to effectiveness, the current research study attempts to identify performance measures of small ventures by focusing on the tourism industry and by doing so develops a conceptual model of small-venture performance in a service industry within its unique conditions. After reviewing theory and research on small venture performance measures in general and in service industries in particular, we propose that performance measures of small tourism ventures constitute a combination of short- and long-term measures. Furthermore, both types of measures include both objective and subjective dimensions. The findings, based on a cluster sample of 305 small tourism venture owner–managers that were interviewed face to face, generally supported the research proposition. The study emphasizes the importance of mapping the venture's achievements, allocating resources, and developing managerial skills to improve its performance and ability to survive in the long run.     

The cumulative nature of the entrepreneurial process: The contribution of human capital,planning and environment resources to small venture performance

The study is theoretically grounded in the resource-based view and applied to a service industry-tourism. It examined the performance of small ventures by utilizing an integrated dynamic model of entrepreneur choices and resource accumulation. Each phase in the process is added to previous one. Findings from 305 small tourism ventures revealed that the human capital of the entrepreneur, particularly managerial skills, were the greatest contributing factor to performance. This was followed by venture type. The study illustrates the unique nature of the entrepreneurial process among small ventures, often defined as “lifestyle businesses”.     

Gauging the success of social ventures initiated by individual social entrepreneurs

This paper focuses on identifying the factors affecting the success of social ventures operating in social settings in Israel. An exploratory qualitative field study included 33 social ventures, founded in the 1990s by individuals acting independently of their positions in other organizations. The study demonstrates eight variables as contributing to the success of the social ventures, arranged in the order of their value: (1) the entrepreneur's social network; (2) total dedication to the venture's success; (3) the capital base at the establishment stage; (4) the acceptance of the venture idea in the public discourse; (5) the composition of the venturing team, including the ratio of volunteers to salaried employees; (6) forming cooperations in the public and nonprofit sectors in the long-term; (7) the ability of the service to stand the market test; and (8) the entrepreneurs’ previous managerial experience.     

The evolution of interorganizational relationships in emerging ventures: An ethnographic study within the new product development process

Emerging ventures rarely have the resources they need, which often force them to reach beyond their boundaries to access these resources. While the field has acknowledged how critical external relationships are in the emergence process, we lack an understanding of how these relationships evolve. Drawing on fourteen longitudinal case studies, this article begins to fill that gap by examining how emerging ventures use interorganizational relationships to discover, develop, and commercialize new products. We found that emerging ventures tended to establish outsourcing relationships early and that many outsourcing relationships progressed into alliances. This suggests that these early relationships are dynamic, evolve through the emergence process, and may be critical to the successful emergence of a venture. We also discovered that many entrepreneurs developed strong socioemotional bonds with their alliance partners. Unexpectedly, our study revealed that in many cases these socioemotional bonds clouded the entrepreneur's judgment of the partner's abilities and led to problems that threatened the venture's survival.     

Home base and knowledge management in international ventures

This paper examines the scope and sequence of international activities carried out by nascent international ventures. Building on earlier research about foreign direct investment (FDI) and knowledge management in international firms and on the analysis of six international ventures the paper develops a number of propositions. We suggest that international ventures are conceived as ‘international’ because cross-border activities increase the chances of venture survival and growth. We also suggest that, in the early stages of international ventures, cross-border activities that augment the venture's knowledge base are more prevalent than cross-border activities that exploit the venture's knowledge base. Finally, the paper points out research trajectories for more detailed studies of knowledge management in international ventures.     

Is venture capital worth it? Effects on firm performance and founder returns

This paper extends research on venture capital (VC) finance by studying its effects on a venture's performance and on its founders' returns beyond an initial public offering (IPO). A “founder performance” construct, defined as a founder's financial and nonfinancial returns, is proposed and used to measure and compare returns to founders with returns to investors and firm performance. In general, venture characteristics pre-IPO and venture performance post-IPO were not significantly different when comparing ventures with and without VC backing. Only when VC backing is very high, do pre-IPO resources and funding improve significantly. However, higher levels of resource endowments did not seem to affect post-IPO performance for the venture or its investors. On the other hand, founders resorting to VC funding before taking their company public generated significantly less wealth for themselves and were less likely to remain as CEOs of their ventures after the IPO. Results suggest that founders motivated primarily by wealth creation and those motivated by remaining in control of their ventures should, in both instances, minimize VC backing when taking their ventures public. The finding that founder performance differs from venture and investor performance calls for future research to explore potential conflicts of interest that may arise from the double role of founders as principals and agents.     

New Venture Performance in Transition Economies from Different Institutional Perspectives

Building on institutional theory, this study examines the effects of dysfunctional competition and government ties on new venture performance in transition economies. And, it goes deeper to investigate how these effects are contingent on a new venture's entrepreneurial orientation (EO). It finds that EO weakens the negative relationship between dysfunctional competition and new venture performance but exacerbates the negative linkage of government ties to new venture performance. The findings not only illustrate how government impacts new venture performance in transition economies, but also indicate that new ventures can leverage entrepreneurship to cope with the effects of government‐related factors.     

Speed to Legal Registration and Nascent Venture Performance: A Temporal Dilemma for Nascent Entrepreneurs in an Emerging Economy

In this paper, we examine the effect of a nascent venture's speed to legal registration during its formation on the initial venture performance in an emerging economy. Quickly obtaining legitimacy via legal registration in the early stages of a new venture's formation accelerates its resources acquisition and transition to other start‐up activities, facilitating the venture to seize dynamic entrepreneurial opportunities; however, in an emerging economy, quick legal registration also incurs substantial costs and compliance activities that may inhibit the venture's engagement in other start‐up activities. A nascent venture in an emerging economy suffers from being either too fast (early) or too slow (late) in registering its business during the formation process, and the relationship between the speed to registration and nascent venture performance is best reflected by an inverse U‐shape. Moreover, the inverse U‐relationship becomes more pronounced when the entrepreneurial opportunity is more innovative. Based on analyzing 145 nascent entrepreneurs from the event history data set of the China Panel Study of Entrepreneurial Dynamics (CPSED), we found strong support for our arguments.     

Crowdfrauding: Avoiding Ponzi entrepreneurs when investing in new ventures

Crowdfunding has gained substantial interest in the U.S., allowing entrepreneurs to raise startup capital in exchange for equity in their ventures. This approach to equity capital can open up new sources of venture finance to legitimate entrepreneurs, but little attention has been given to how it offers new opportunities for illegal entrepreneurs to defraud investors. We adopt a forensic approach to examine entrepreneurs who launch Ponzi ventures—businesses that continually bring in new investors in order to use their money to pay returns to earlier investors—to demonstrate the ease, creativity, and audacity with which these illegal entrepreneurs operate. The provided examples of Ponzi entrepreneurs show how easily they can circumvent the safeguards purported to protect investors: screening by ‘the crowd,’ transparency and documentation requirements, independent audit reports, and withholding of funds until the venture's financial goal has been met. In this article, we offer possible solutions to help protect investors, legitimate entrepreneurs, and business in general from the damage created by illegal entrepreneurs.     

Value proposition evolution and the performance of internal corporate ventures

The success of internal corporate ventures (ICVs) is contingent upon their ability to: (1) anticipate the bases on which their offerings appeal to their target markets, (2) adjust these value propositions as the venture develops, and (3) leverage their parent corporations' relevant knowledge stocks. Aimed at developing a deeper understanding of the process requirements of successful exploratory initiatives, we build and test a model of venture performance using data from 145 ICVs. We find that value proposition evolution is related to venture performance in a curvilinear manner. ICVs whose value propositions exhibit moderate evolution perform better than ICVs whose value propositions exhibit no evolution or extensive evolution. Furthermore, the value proposition evolution–performance relationship is moderated by the parent corporation's familiarity with the venture's target market.     

Technology strategy and software new ventures' performance: Exploring the moderating effect of the competitive environment

Technology strategy (TS) is one of the most important aspects of any firm's strategic posture especially in dynamic environments such as the computer software industry. Not only do new ventures face the pressures that accompany all young companies (e.g., shortages of capital), but they also have to keep up with a rapid rate of technological change. Consequently TS, the sum of a firm's choices on how to develop and exploit its technological resources, can profoundly affect a venture's performance and survival.This empirical study examines the relationships between TS and new venture performance (NVP). By focusing on TS variables and analyzing their performance outcomes, the study offers insights into the factors that can influence the success of new ventures in a fast-paced environment. This study also examines key environmental moderators, those external environmental forces, which can significantly impact the strength or direction of the relationship between a firm's TS and NVP.The study examines five TSs that can enhance NPV. The first is radicality, which means developing and introducing new products ahead of competitors. The second is the intensity of product upgrades, which refers to a venture's commitment to introducing more refinements and extensions of its products than its competition. The third is the level of R&D spending, which indicates a venture's strong investment in internal research and development activities. The fourth is the use of external technology sources (e.g., strategic alliances and licenses) to augment a firm's own R&D efforts. The final dimension is the use of     

Israeli women entrepreneurs: An examination of factors affecting performance

This article examines individual factors influencing performance of 200 Israeli women-owned businesses. Whereas research on women entrepreneurs is extensive in developed countries, especially in the United States and Europe, there are comparatively few studies of performance of women-owned businesses in non-OECD countries. There is evidence that social structures (work, family, and organized social life) vary among developed and developing countries as these relate to women entrepreneurs. However, these differences have not been considered as they may relate to theories explaining performance of women-owned businesses. The extent to which existing theories are useful in the context of non-OECD countries is of increasing importance as women in these countries are assuming a greater role in enterprise creation and economic development as a result of radical geopolitical and economic policy changes worldwide.In Israel, women suffer from occupational segregation and typically earn less money than their male counterparts, despite a generally high level of education. Entrepreneurship offers a vehicle for Israeli women to achieve economic parity. Approximately 5.1% of Israeli women are self-employed (compared with 15% of Israeli men) of the 816,800 Israeli working women. This study is the first systematic investigation of performance variation among Israeli women entrepreneurs, thereby contributing to our understanding of women's entrepreneurship in non-OECD countries.Five theoretical perspectives explain performance: individual motivations and goals; social learning (entrepreneurial socialization); network affiliation (contacts and membership in organizations); human capital (level of education, business skills); and environmental influences (location, sectoral participation, and sociopolitical variables). Each of these perspectives is associated with empirical work showing relationships between these individual level factors and performance. Three questions directed this study: (1) Which factors influence the performance of Israeli women entrepreneurs? (2) Which factors explain any variance in performance among businesses established by Israeli women entrepreneurs? (3) How similar are these explanatory factors to those found in other countries?A sample of 220 Israeli women business-owners responded to a survey instrument originally composed by Hisrich and Brush (1982, 1985) that was translated into Hebrew and adapted to the particular conditions of the Israeli population. A majority of the questionnaires was distributed at meetings of professional associates of women entrepreneurs and returned by mail, but one-fourth was distributed to women who were not members of any professional association. No significant differences were found between the respondents who were members or non-members of associations. Reliability testing showed alpha coefficients of 0.65 and higher for scaled questions, which is acceptable for survey data. Statistical analyses, including Pearsons's correlations and multiple regressions, examined relationships between factors identified from theoretical perspectives and performance, which was measured by profitability, income, size (number of employees), and revenues.Demographic variables were examined, and the age of the woman entrepreneur's children was significantly related to profitability (p < .01). The majority of Israeli women entrepreneurs are married and became entrepreneurs after their children were grown. This is consistent with the strong family orientation prevalent in the Israeli culture and the existence of institutional arrangements that support the working mother model as long as she gives priority to family responsibilities.Of the five theoretical perspectives, results showed network affiliation, motivation, human capital, and environmental factors affected different aspects of performance, whereas social learning theory or existence of a role model had no significant effect on performance outcomes. Network affiliation was significantly related to profitability (p < .001), and the use of outside advisors also was related to revenue. In contrast, participation in multiple networks was negatively related to revenue, income, and size of the business.Motivations showed a strong relationship to performance. Factor analysis identified three basic groups of motives: achievement, independence, and economic necessity. Similar to findings in other countries, achievement motives were highly related to personal income, whereas economic necessity was significantly related to both profitability and revenue.Analyses of human capital variables showed mixed results; education level, areas of study, and previous entrepreneurial experience had no effect on previous experience. The fact that this population was highly educated (51% had university degrees) may have impacted on this result. Consistent with prior research findings, previous experience in the industry had a direct and significant effect on performance (p < .001). Previous salaried employment and involvement in the creation of a business were significantly correlated with sales and number of employees. Results also showed that indexes of women entrepreneurs' business skills (obtaining financing, budgeting, labor management, and planning ahead) were highly correlated with revenues (p < .01). Regression analysis showed the business skill index significantly related to profitability (p < .01). Environmental factors were significantly related to performance in that the sectoral affiliation (service versus manufacturing) was related to revenues and employees, but not to profitability and income.This study supports previous research from the United States and Europe on women entrepreneurs, which found that performance is related to previous industry experience, business skills, and achievement motivation. However, the differential effects of network affiliations was significantly more important for women entrepreneurs in Israel. Affiliation with a single network was highly related to profitability, whereas involvement in multiple networks was detrimental to both revenues and the number of employees. These findings imply that to perform well, Israeli women entrepreneurs should gain related industry experience, develop business skills, and seek to achieve success. Most importantly, commitment to a single network for support and advice is better than a loose alignment with many support groups.This research has implications for studies of women entrepreneurs in other non-OECD as well as developing countries. In countries such as Russia or China, anecdotal evidence shows self-employment offers women an opportunity to improve their economic status as more capitalistic policies are adopted. The extent to which individual factors found important in this study, such as business skills, motivations, previous industry experience, and network affiliation, affect performance in these countries is a topic for future investigation. This study suggests that individual factors affect performance differentially as a consequence of variations in social structures, work, organized social life, and family. Future research should explore the extent to which this is the case. Examination of aspects of organizational strategies and government policies as these influence performance is another topic for future study.     

A founding-team model of creating a venture's culture

As many new ventures are started by founding teams, it is these founding teams that likely engage in creating their venture's culture. We draw on theories of cultural dynamics and the literature on team cognitive diversity to investigate the creation of a new venture's culture. Specifically, we theorize how a founding team's cognitive diversity impacts the team's production of cultural information and the transmission of that information throughout the venture. Cognitive diversity directly influences the founding team's production of cultural information by shaping the diversity of the information set and the speed of its production. Moreover, cognitive diversity can give rise to faultlines within the venture, impacting how venture members interpret cultural information. Importantly, our model suggests a complex interplay between the production and interpretation of cultural information. Understanding culture creation in new ventures is important because a new venture's culture shapes its legitimacy and thus its access to stakeholder resources for venture emergence.     

Technology strategy and new venture performance: A study of corporate-sponsored and independent biotechnology ventures

New ventures, companies eight years or younger, play a major role in the development of an emerging, high-technology industry. Corporate-sponsored new ventures (those supported by an established corporation) and independent ventures (those founded by independent entrepreneurs) frequently battle for industry leadership and financial success. Whereas both venture types use technology to achieve financial and market success, little is known about the differences in their technology strategies.Technology strategy is the plan that guides a new venture's decisions on the development and use of technological capabilities. This strategy covers six major areas. The first is selecting the pioneering posture, where a venture decides whether or not be among the industry's first companies to introduce new products (technologies) to the market. The second is determining the number of products to be introduced to the market. The third is choosing the extent of a venture's use of internal and external R&D sources. Internal sources usually refer to in-house R&D activities. External sources may include purchasing or licensing of technology from other companies, or joining strategic alliances to acquire that technology. The fourth is deciding the level of R&D spending. The fifth is selecting the combination (portfolio) of applied and basic research projects. Whereas basic R&D advances science, applied R&D leads to new products and technologies. The sixth, and final, dimension is the venture's use of patenting to protect any competitive advantages it might gain from its R&D activities.This article reports the results of a study that explored the differences in the technology strategies and performance of corporate and independent ventures. The biotechnology industry was chosen to test the study's hypotheses, using 112 ventures.Seven of the study's hypotheses focused on the potential variations in technology strategy between corporate and independent ventures. Independent ventures (IVs) were expected to surpass corporate ventures (CVs) in pioneering new products (technologies), using internal R&D, and emphasizing applied R&D. CVs were expected to surpass IVs in introducing new products, using external R&D sources, spending on R&D, and patenting. The study's remaining three hypotheses covered possible variations in new venture performance (NVP) and their sources.The results showed that IVs focused more on pioneering, pursued a more applied R&D portfolio, and emphasized internal R&D more than CVs. CVs utilized external technology sources, spent more heavily on R&D, stressed basic R&D, and used patenting more intensively than IVs. These results were consistent with the hypotheses. However, contrary to expectations, there were no significant differences between CVs and IVs in the frequency of new product introductions, probably because most ventures were at the invention, rather than the commercialization, stage.The results on the NVP of CVs and IVs were counter to expectations. IVs outperformed CVs, probably because of the high motivation of the IV owners who reaped the rewards of growth and profitability. Also, whereas CVs may have greater access to the resources of their sponsors, political conflicts and rigid corporate controls might have reduced their ability to achieve competitive advantages.The results also indicated that CVs and IVs appeared to gain competitive advantages from different technological choices. Pioneering, a focus on applied R&D, and extensive use of the internal R&D sources were also positively associated with the performance of IVs. Heavy R&D spending, the use of both internal and external R&D sources, frequent product introductions, and patenting were positively associated with the performance of CVs. Finding that technology strategies significantly impacted NVP should encourage executives to consider pursuing a formal technology strategy. Likewise, the finding that different dimensions of technology strategy influenced the performance of CVs and IVs in different ways has practical implications. CV managers can learn from their higher performing IV rivals. Also, because established companies frequently acquire IVs, information about their technology strategies can be valuable in assimilating the acquired ventures. Overall, the results show that technology strategy is an important factor in enhancing new venture performance.