The ambitious entrepreneur: High growth strategies of women-owned enterprises

During the last two decades, researchers have sought to develop categories of entrepreneurs and their businesses along a variety of dimensions to better comprehend and analyze the entrepreneurial growth process. Some of this research has focused on differences related to industrial sectors, firm size, the geographical region in which a business is located, the use of high-technology or low-technology, and the life-cycle stage of the firm (i.e., start-up vs. more mature, formalized companies). Researchers have also considered ways in which entrepreneurs can be differentiated from small business managers. One of these classifications is based on the entrepreneur's desire to grow the business rapidly. This is the focus of our study.To date, the media have paid considerable attention to rapidly growing new ventures. However, still lacking are large-scale research studies guided by theory through which we can expand our knowledge of the underlying factors supporting ambitious expansion plans. Some research has identified factors that enhance or reduce the willingness of the entrepreneur to grow the business. Factors include the strategic origin of the business (i.e., the methods and paths through which the firm was founded); previous experience of the founder/owner; and the ability of the entrepreneur to set realistic, measurable goals and to manage conflict effectively.Our study attempted to identify the strategic paths chosen by entrepreneurs and the relation of those paths to the growth orientation of the firm. The entrepreneurs sampled in this study are women entrepreneurs across a wide range of industrial sectors. Recent reviews of entrepreneurship research have suggested the need for more studies comparing high-growth firms with slower-growth firms to better delineate their differences in strategic choices and behaviors.Our study sought to answer the following questions: What characterizes a “high growth-oriented entrepreneur?” Is this distinction associated with specific strategic intentions, prior experience, equity held in previous firms, the type of company structure in place, or success factors the entrepreneur perceives are important to the business? Do “high growth” entrepreneurs show greater entrepreneurial “intensity” (i.e., commitment to the firm's success)? Are they willing to “pay the price” for their own and their firm's success? (i.e., the “opportunity costs” associated with business success and growth). Other relationships under investigation included different patterns of financing the business' start-up and early growth. Do “high-growth” entrepreneurs use unique sources of funding compared with “lower-growth” entrepreneurs?Eight hundred thirty-two entrepreneurs responded to a survey in which they were asked to describe their growth intentions along nineteen strategic dimensions, as well as respond to the foregoing questions. Some of the strategic activity measures included adding a new product or service, expanding operations, selling to a new market, and applying for a loan to expand operations. Actual growth rates based on sales revenues were calculated, and average annualized growth rates of the industrial sectors represented in the sample were obtained. This study showed that high-growth-oriented entrepreneurs were clearly different from low-growth-oriented entrepreneurs along several dimensions. The former were much more likely to select strategies for their firms that permitted greater focus on market expansion and new technologies, to exhibit greater intensity towards business ownership (“my business is the most important activity in my life”), and to be willing to incur greater opportunity costs for the success of their firms (“I would rather own my own business than earn a higher salary while employed by someone else”).The high-growth–oriented entrepreneurs tended to have a more structured approach to organizing their businesses, which suggests a more disciplined perception of managing the firm. In summary, results showed the group of high-growth–oriented entrepreneurs, labeled “ambitious,” as having the following distinctions: strategic intentions that emphasize market growth and technological change, stronger commitment to the success of the business, greater willingness to sacrifice on behalf of the business, earlier planning for the growth of the business, utilization of a team-based form of organization design, concern for reputation and quality, adequate capitalization, strong leadership, and utilization of a wider range of financing sources for the expansion of the venture. The purpose in uncovering these differences is to enable entrepreneurs and researchers to identify more clearly the attributes of rapid-growth ventures and their founders and to move closer to a field-based model of the entrepreneurial growth process which will help delineate the alternative paths to venture growth and organizational change.     

Networking and growth of young technology-intensive ventures in China

More often than not, new ventures lack established products, known technologies, longstanding customer relations, experienced managerial teams, sufficient capital, and strong reputations. Almost by definition, small, new firms lack the resources of many larger, established firms. The task of an infant firm, and a measure of its success, is to make a transition from being resource weak to being resource strong.How can resources that are critical for profitable growth be acquired for the resource weak new venture? Researchers have found that entrepreneurs can gain access to valuable resources and they can seek to achieve competitive advantage through “networking activities.” Forming and utilizing available relationships with external organizations can allow entrepreneurs to build credibility, gain advice, financing, and customer access, build a positive image and obtain resources at below-market prices, and obtain channel access, information, and innovations. Business relationships with other organizations allow an entrepreneur to achieve desired business results through “asset parsimony.”A favorable view toward networking for new ventures leaves a number of unanswered questions, however. Relevant research questions might include, who should the entrepreneur seek as a business partner? Are all inter-organizational relationships equal, or are some types more valuable to new ventures than other relationships? Do firms relying on high levels of networking activities actually outperform firms that less actively seek resources through external organizational relationships?The present study provides a specific understanding of the concept of networking for entrepreneurs. We propose that networking can be understood in terms of “range,” the number of external relationships to obtain resources, and of “intensity,” the frequency of contact of and amount of resource obtained from these relationships. This research project evaluates the range and intensity of networking among high-growth and low-growth entrepreneurial ventures.Extensive interviewing with managers of six young technology-oriented firms in the People's Republic of China (PRC) affirmed the importance of entrepreneurial networking. Managers in the three high-growth firms reported greater range and intensity of business networking than did managers of three low-growth firms, matched by industry and age. Moreover, the relationship between networking activities and growth transcended the stage of firm development.Where networking range and intensity are deemed important in the growth process, new venture success may call for entrepreneurs to reach out deliberately to external organizations to capture needed resources. To a certain extent, such networking activities run counter to important entrepreneurial motivations of independence and autonomy. The concept of networking, and the results of this study, imply that entrepreneurs need to combine the spirit of independence with the reality of resource dependence, and they need to balance personal autonomy with strategic business relationships.This study also contributes to the understanding of entrepreneurship in our increasingly global economy, particularly in the PRC. Business relationships between the United States and the PRC have been expanding rapidly in the last decade. Many foreign businesses seek license agreements, joint venture partners, equity participation, or channel relationships with young ventures in that country. Do the same rules of networking apply in the PRC as the literature suggests apply in the United States? New ventures in this study were found to engage in processes of networking activities consistent with those in the West. Although networking activities may have different cultural roots, firm success appeared influenced by the same principles of networking.     

Exploring start-up event sequences

This research analyzed new venture start-up activities undertaken by 71 nascent entrepreneurs. Nascent entrepreneurs are individuals who were identified as taking steps to found a new business but who had not yet succeeded in making the transition to new business ownership. Longitudinal data for the study comes from a secondary data analysis of two representative samples, one of 683 adult residents in Wisconsin (Reynolds and White 1993) and the other of 1016 adult residents of the United States (Curtin 1982). These surveys were conducted between 1992 and 1993, and the nascent entrepreneurs were reinterviewed six to 18 months after their initial interview.Three broad questions were addressed: (1) What activities do nascent entrepreneurs initiate in attempting to establish a new business? (2) How many activities do nascent entrepreneurs initiate during the gestation of the start-up? and (3) When are particular activities initiated or completed?Between the first and second interview, 48% of the nascent entrepreneurs reported they had set up a business in operation. Over 20% had given up and were no longer actively trying to establish a business. Almost a third of the respondents reported they were still trying to establish a firm.As a way to summarize the results and as a springboard toward some insights into the implications of this research for practice and future research, we developed the following activity profiles of the three types of nascent entrepreneurs studied. These profiles are offered as a combination of both fact and some intuition about the findings.STARTED A BUSINESS. Nascent entrepreneurs who were able to start a business were more aggressive in making their businesses real. They undertook activities that made their businesses tangible to others: they looked for facilities and equipment, sought and got financial support, formed a legal entity, organized a team, bought facilities and equipment, and devoted full time to the business. Individuals who started businesses seemed to act with a greater level of intensity. They undertook more activities than those individuals who did not start a business. The pattern of activities seem to indicate that individuals who started firms put themselves into the day-to-day process of running an ongoing business as quickly as they could and that these activities resulted in starting firms that generated sales (94% of the entrepreneurs) and positive cash flow (50% of the entrepreneurs). What is not known is how successful or profitable these new firms will be over time. For example, 50% of the firms that were started had not reached positive cash flow and these firms may have been started by individuals who were foolhardy and rushed into operation of a business that would not be sustainable.GAVE UP. The pattern of activities for the group of entrepreneurs who gave up seem to indicate that these entrepreneurs discovered that their initial idea for their businesses would not lead to success. The finding that the activity of developing a model or prototype differentiated individuals who gave up from those who were still trying would suggest that those who gave up had “tested” their ideas out and found that they would not work according to their expectations. Nascent entrepreneurs who gave up seemed to be similar in their activity patterns compared with those who started their firms, that is, individuals who gave up pursued the activities of creating a business in an aggressive manner at the beginning of the process. But as the business unfolded over time, these entrepreneurs decreased their activities and then ceased start-up activities. This group of individuals might be seen as either having the wisdom to test their ideas out before jumping into something that might lead to failure or lacking the flexibility to find more creative ways to solve the problems that they were confronted with.STILL TRYING. It would seem that those who are still trying are not putting enough effort into the start-up process in order to find out whether they should start the business or give up. Those still trying had undertaken fewer activities than individuals in the other two groups. The still trying entrepreneurs were devoting their short-term efforts toward activities internal to the start-up process (e.g., saving money and preparing a plan) and less effort toward activities that would make the business real to others. The still trying entrepreneurs may be all talk and little action. Or these still trying entrepreneurs might be involved in developing businesses that take longer for these particular opportunities to unfold. (It should be noted that there was no industry effect across the three groups.)Our advice to individuals considering business start-up is that the results seem to provide evidence that nascent entrepreneurs should aggressively pursue opportunities in the short-term, because they will quickly learn that these opportunities will either reveal themselves as worthy of start-up or as poor choices that should be abandoned. Individuals who do not devote the time and effort to undertaking the activities necessary for starting a business may find themselves perennially still trying, rather than succeeding or failing.What entrepreneurs do in their day-to-day activities matters. The kinds of activities that nascent entrepreneurs undertake, the number of activities, and the sequence of these activities have a significant influence on the ability of nascent entrepreneurs to successfully create new ventures. This study suggests that the behaviors of nascent entrepreneurs who have successfully started a new venture can be identified and differentiated from the behaviors of nascent entrepreneurs who failed. We believe that future studies will more precisely identify the kinds of behaviors appropriate for certain new venture conditions. If such contingency information can be generated, entrepreneurship research is likely to have significant benefits for entrepreneurship practice, education, and public policy.     

Valuation of Angel‐Backed Companies: The Role of Investor Human Capital

This article examines how angel investors' human capital affects the valuation of their portfolio companies, based on the pre‐money valuation of 123 investment rounds in 58 Belgian companies. We argue that angel investors with higher levels of human capital will perceive a higher value‐creating potential in entrepreneurial opportunities through their ability to see more value‐creating options, a higher value‐adding potential post‐investment, and an enhanced legitimacy provided to the venture. Economic theories suggest they appropriate these rents through lower valuations, whereas stewardship theory suggests they share value creation with entrepreneurs. Consistent with stewardship theory, we show angel investors negotiate higher valuations when they have higher levels of human capital, more specifically if they studied longer, have a business degree, more entrepreneurial experience, or previous professional law experience. As such, our results contrast with the behavior of venture capital investors who negotiate lower valuations when they have more experience.     

The nature of entrepreneurial experience,business failure and comparative optimism

Entrepreneurial (i.e. business ownership) experience may enable some entrepreneurs to temper their comparative optimism in subsequent ventures. The nature of entrepreneurial experience can shape how entrepreneurs adapt. Using data from a representative survey of 576 entrepreneurs in Great Britain, we find that experience with business failure was associated with entrepreneurs who are less likely to report comparative optimism. Portfolio entrepreneurs are less likely to report comparative optimism following failure; however, sequential (also known as serial) entrepreneurs who have experienced failure do not appear to adjust their comparative optimism. Conclusions and implications for entrepreneurs and stakeholders are discussed.     

Does entrepreneurial self-efficacy distinguish entrepreneurs from managers?

Previous research on the psychology of entrepreneurs found that personality traits such as locus of control failed to distinguish entrepreneurs from managers. In search of an individual characteristic that is distinctively entrepreneurial, we proposed an entrepreneurial self-efficacy construct (ESE) to predict the likelihood of an individual being an entrepreneur. ESE refers to the strength of a person’s belief that he or she is capable of successfully performing the various roles and tasks of entrepreneurship. It consists of five factors: marketing, innovation, management, risk-taking, and financial control.We conducted two studies, one on students and the other on small business executives. Study 1 found that the total ESE score differentiated entrepreneurship students from students of both management and organizational psychology, and that across the three types of students, ESE was positively related to the intention to set up one’s own business. We also found the entrepreneurship students to have higher self-efficacy in marketing, management, and financial control than the management and psychology students. In study 2, we simultaneously tested effects of ESE and locus of control on the criteria of founders vs. nonfounders of current businesses. After controlling for individual and company background variables, the effect of ESE scores was significant, but the effect of locus of control was not. More specifically, it was found that business founders had higher self-efficacy in innovation and risk-taking than did nonfounders.The results of this study demonstrate the potential of entrepreneurial self-efficacy as a distinct characteristic of the entrepreneur. From these results, some important implications can be drawn on entrepreneurial assessment, education, counseling, and community intervention. First, ESE can be used to identify reasons for entrepreneurial avoidance. There may be many individuals who shun entrepreneurial activities not because they actually lack necessary skills but because they believe they do. This is especially true for sectors of the population such as women or those minority groups who are perceived as lacking entrepreneurial traditions. Communities and individuals could benefit from identifying sources of entrepreneurial avoidance by targeting their efforts toward enhancing ESE of particular groups or individuals for specific aspects of entrepreneurship.An additional use of ESE is to identify areas of strength and weakness to assess the entrepreneurial potential of both an individual and a community. Once entrepreneurial potential is identified, resources can be channeled and more effectively used to promote entrepreneurship. Finally, diagnosis and treatment of ESE can be performed on real entrepreneurs. The entrepreneur may be completely avoiding, or performing less frequently, certain critical entrepreneurial activities because s/he lacks self-efficacy. For example, the entrepreneur may be avoiding company growth for fear of losing control. Identification and removal of self-doubt will enable the entrepreneur to be actively engaged in entrepreneurial tasks, more persistent in the face of difficulty and setbacks, and more confident in meeting challenges.Overall, ESE is a moderately stable belief and requires systematic and continuous efforts to be changed. Two broad approaches can be taken toward desired change. One is the micro-approach that directly focuses on people’s beliefs. In designing and conducting entrepreneurship courses, training institutions should not just train students in critical entrepreneurial skills and capabilities but also strengthen their entrepreneurial self-efficacy. The current state of entrepreneurship courses in most management schools may fall short in both respects. Courses focus on commonly identified management skills, but often ignore entrepreneurial skills such as innovation and risk-taking. Furthermore, the teaching of entrepreneurial skills tends to be technical, with insufficient attention paid to the cognition and belief systems of the entrepreneur. Educators should take into account entrepreneurial attitudes and perceptions when designing or assessing their course objectives. Conscious efforts could be made to enhance ESE by involving the students in “real-life” business design or community small business assistance, by inviting successful entrepreneurs to lecture, and by verbal persuasion from the instructor and renowned entrepreneurs.The second approach to enhancing ESE is to work on the environment of potential and actual entrepreneurs. According to the reciprocal causation model, the environment may affect self-efficacy not only directly but also indirectly through performance. An environment perceived to be more supportive will increase entrepreneurial self-efficacy because individuals assess their entrepreneurial capacities in reference to perceived resources, opportunities, and obstacles existing in the environment. Personal efficacy is more likely to be developed and sustained in a supportive environment than in an adverse one. A supportive environment is also more likely to breed entrepreneurial success, which in turn further enhances entrepreneurial self-efficacy. Communities can work toward creating an efficacy enhancing environment by making resources both available and visible, publicizing entrepreneurial successes, increasing the diversity of opportunities, and avoiding policies that create real or perceived obstacles.     

Entrepreneurial information search

Information is a key resource for the new venture. Despite the importance of information search practices, little research has examined whether entrepreneurs show a tendency to search for more or less information under particular conditions.This article considers whether information search might be explained by concepts of bounded rationality. Such theories lead to the counterintuitive expectation that entrepreneurs with less experience or those entering unfamiliar fields would search less because of their more limited understanding of what is needed. In addition, entrepreneurs with higher levels of initial confidence would search less because their “entrepreneurial euphoria” may limit their ability to assess their own needs for additional information.This study examined the information search practices of 1176 entrepreneurs. It considered six sources of information that were widely used: accountants, friends or relatives, other business owners, bankers, lawyers, and generally available books and manuals. Three measures of search intensity were developed, with the first reflecting the relative importance of all six sources and the remaining two focusing upon the subcategories of professional and personal sources.It was found that those who had no entrepreneurial experience, on the average, sought more, not less, information. However, as expected, those who ventured into fields which were different and those who had higher levels of initial confidence sought less information. An interaction effect provides insight into these findings and reveals that inexperienced entrepreneurs varied their search depending upon whether they were in familiar or unfamiliar domains. In particular, novice entrepreneurs searched less extensively in unfamiliar domains, a behavior consistent with bounded rationality. By contrast, experienced entrepreneurs did not vary their search pattern. It was also found that entrepreneurs having high levels of confidence sought less information, as expected.The behavioral tendencies observed here appear to have clear implications for entrepreneurs and their advisors. We might expect that those venturing into fields they do not know would have more to learn and thus would search more aggressively. However, neither inexperienced nor experienced entrepreneurs acted in this way. In fact, inexperienced entrepreneurs lessened their search as they entered fields they did not know, consistent with the bounded-rationality model. Many prior studies have found that entrepreneurs entering unfamiliar fields are, on the average, less successful (Cooper and Gimeno-Gascon 1992). This certainly raises questions about whether entrepreneurs, both experienced and inexperienced, might benefit from greater emphasis upon gathering and utilizing external information as they enter fields that are new to them. Outside advisors (if the entrepreneur will utilize them) may be helpful in urging and assisting entrepreneurs who enter unfamiliar fields to engage in more extensive information search, even though they may have less developed networks of contacts and less of a feeling for what is needed in such fields. With respect to initial confidence, entrepreneurs and their advisors should recognize that high levels of confidence may lead to lower levels of information search. Recognizing this tendency, they should use care to ensure that entrepreneurial euphoria does not lead to blinders in the search for information.     

Linking family-to-business enrichment and support to entrepreneurial success: Do female and male entrepreneurs experience different outcomes?

This study used survey data from 253 entrepreneurs who founded small to medium sized enterprises (SMEs) to examine how experiences in their family domain may benefit their experiences in their business domain. Specifically, it hypothesized that affective family-to-business enrichment, instrumental family-to-business enrichment, and family-to-business support would be positively related to entrepreneurial success and that each relationship would be more positive for female entrepreneurs than male entrepreneurs. Entrepreneurial success was assessed by economic measures (business performance, growth in employment) and measures of satisfaction with the entrepreneurial experience (satisfaction with status, satisfaction with employee relationships). Results offered substantial support for the notion that female entrepreneurs benefit from the linkages of family-to-business enrichment and support to entrepreneurial success, whereas they offered no support for the notion that male entrepreneurs benefit from these linkages. Female entrepreneurs may experience such benefits because of their relative lack of access to other resources such as human, social, and financial capital and because the female gender role encourages them to pursue work–family synergies. In contrast, male entrepreneurs may fail to experience such benefits because of the relative abundance of other resources available to them and because the male gender role discourages them from pursuing work–family synergies.     

Exit, stage left why entrepreneurs end their entrepreneurial careers before retirement

This article examines the process of entrepreneurship from a different perspective. It considers evidence not only about practicing entrepreneurs but also about ex-entrepreneurs: individuals who have ended their entrepreneurial pursuits to work for someone else.Why entrepreneurs ended their entrepreneurial careers is understood by examining not only their expressed reasons for leaving, but also by observing how they exited, when they exited, and who exited compared to who remained.The study's findings are tentative. They are published now because they have important implications for potential entrepreneurs, for practicing entrepreneurs, and for those working with entrepreneurs either directly or indirectly (e.g., policymakers) who must make important decisions before more evidence is available .Overall, the findings indicate that a high-risk profile exists that distinguishes ex-entrepreneurs, particularly those with brief careers, from “more seasoned” entrepreneurs who have experienced longer lives as entrepreneurs.Perhaps the most important implication is that early-career start-ups may be better than previously thought. Preexisting profiles of the “ideal entrepreneurs” place them in their mid- to late thirties at the time of venture start up. But this start-up age (and older ages) were highly correlated in this study with very short, aborted careers compared to practicing entrepreneurs and ex-entrepreneurs who started earlier.A second implication is related to the first: those who started earlier were able to do a better job of anticipating their future entrepreneurial pursuits than were those who started later, mainly because they were sensitized to entrepreneurship as a career possibility at a much earlier age. Early planning for an entrepreneurial career is correlated with longer careers not just because they start earlier but because they last longer.A third implication is the need to scale down the scope (and risk) of the first venture. Such venture “downsizing” can lessen financial requirements while also giving new entrepreneurs the flexibility to start another, often better, venture after they get into business and learn about new opportunities, contacts, and skills that they could not foresee or develop before starting their first ventures.A fourth implication reinforces existing notions about the relative perils of the first few years of an entrepreneurial career. Survival rates increase considerably after the completion of the second year and the probability of a long career rises substantially after the sixth year of entrepreneurial life.A final implication is that the overall costs, risks, and dangers of entrepreneuring have been overstated. Career exit rates are much lower than venture exit rates. Relatively few ex-entrepreneurs apparently suffered truly catastrophic career exits, at least to the extent that they felt that their careers had been very unrewarding and that they had ruled out ever entrepreneuring again.     

Expertenwissen im politischen Prozess — Nutzen,Grenzen und Gefahren

Since the outbreak of the financial and economic crisis, confidence in politicians as well as the economists in their advisory expert panels seems to be at an all-time low. Why do politicians reject science-based advice unless it fits into their political agenda? Are economists misunderstood by politicians and vice versa? The tension between the ideal of evidence-based policy-making and the reality of policy-based evidence-making is hardly a new phenomenon. Therefore, the expectation that Donald Trump, the Brexiteers and European populists will necessarily disappoint their voters because they simply cannot deliver what they have promised is misleading. Experts would be well advised to use the debate on the post-factual era as an impetus to reflect critically on their profession. One opinion expressed in this Zeitgespräch is that the contested societal and political impact of modern economics is due to its restricted scientific self-concept. A more open, pluralistic and transdisciplinary self-definition of economics would strengthen its societal influence. Another contributor ponders the proper incentives to persuade academic economists to provide economic policy advice. Key is the independence of advisory institutions like the German Council of Economic Experts. The selection of people with the best scientific qualifications will ensure the reputation of such institutions.     

Does Congruence with an Entrepreneur Social Identity Encourage Positive Emotion Under Environmental Dynamism?

Entrepreneurial identities and emotions can have profound effects on entrepreneurs. We examine how positive emotion (PE) among entrepreneurs may be influenced by the congruence they experience between their self‐concept and the entrepreneur social identity. Given that uncertainty in the business environment can exert powerful effects throughout the entrepreneurial process, we further test the moderating impact of environmental dynamism on the relationship between identity congruence and PE. Results from a study of 175 entrepreneurs indicate that entrepreneurs experiencing greater congruence have higher levels of PE, and that this relationship is stronger in more dynamic environments.     

Stigma and business failure: implications for entrepreneurs’ career choices

We use data from global entrepreneurship monitor to examine the act of entrepreneurial reentry by entrepreneurs who exit a failed business. We study reentry by mode of entry and by form of organizing. We find that, in countries where the levels of stigma and regulatory conveyance of stigma markings were at their highest, entrepreneurs who exited failed businesses were less likely to reenter into entrepreneurial activity. Our finding suggests that negative social and economic sanctions that are associated with stigma markings speak only to one side of the entrepreneurship phenomenon. On the other side, stigma can function as a stimulus for entrepreneurs to defy the illegitimacy of the failed business and to actively seek out and engage in innovative behaviors that contribute to the overall diversity of entrepreneurial activities in their country.     

I can't get no sleep—The differential impact of entrepreneurial stressors on work-home interference and insomnia among experienced versus novice entrepreneurs

When founding and managing a new business, entrepreneurs are frequently confronted with stressors hampering their daily work. The present study examines how these entrepreneurial stressors affect two important interrelated indicators of entrepreneurs' recovery and well-being—that is, their ability to detach from work during non-work times (work-home interference) and their sleep (insomnia). We introduce prior entrepreneurial experience as an important moderator to these relationships, arguing that due to their different learning and coping experiences and their different interpretations of the entrepreneurial role, experienced versus novice entrepreneurs would react differently to entrepreneurial stressors. In an empirical study with 122 entrepreneurs, we found that among experienced entrepreneurs, entrepreneurial stressors primarily had a direct sleep-impairing effect. Among novice entrepreneurs, the same stressors primarily initiated an indirect effect by leading to increased work-home interference and consequently also increased insomnia. Overall, thus, our study shows that both novice and experienced entrepreneurs suffer from insomnia when encountering entrepreneurial stressors—however, the underlying mechanisms differ. Implications are discussed in terms of both theory and practice.     

How young firms achieve growth: reconciling the roles of growth motivation and innovative activities

This special issue focuses on entrepreneurship, innovation and enterprise dynamics, as these key components of any prospering economy are at the heart of the current policy discussion. It gathers the latest national and comparative cross-country evidence about: new business venture formation and the role of framework conditions in fostering entrepreneurial activities; the determinants and outcomes of firms’ innovative activities and, more generally, of business and innovation dynamics; and the determinants and patterns of post-entry firm growth performance. The contributions synthesised in this introductory piece all rely on sound micro-level data and robust econometrics and propose novel findings that are relevant for policy making. Among them, that risk aversion encourages individuals to invest in balanced skill profiles, making them more likely to become entrepreneurs; and that while micro firms may grow when they are young, they are less likely to do so when old.     

What’s so entrepreneurial about intrapreneurs?

This paper discusses the determinants of becoming an intrapreneur. Individuals maximise their utility while deciding among three occupations: independent entrepreneurship, paid employment and intrapreneurship. I show that intrapreneurs resemble employees rather than entrepreneurs. Specifically, comparing the decision-making of intrapreneurs to that of entrepreneurs, the former are significantly more risk averse, expect lower but less uncertain reward and are broadly endowed with a poorer set of entrepreneurial abilities; despite having higher levels of human capital they fail to recognise business opportunities and have lower confidence in their entrepreneurial skills. A distinction within the category of intrapreneurship, based on the level of engagement and therefore the level of personal risks they bear, adds to our understanding of intrapreneurship. Engaged intrapreneurs, i.e., intrapreneurs that expect to acquire an ownership stake in the business, unlike the rest of intrapreneurs, share the attributes usually assumed to characterise entrepreneurs.     

Entrepreneurship: From motivation to start-up

The goal of this article is to reveal the origins of entrepreneurial motivation and to identify the logics of action (entrepreneurial projects) associated with each dimension of this attitude. The study looks to answer the following questions: What needs are at the beginning of a business, what are their intensities, and to what extent does entrepreneurial motivation influence projects? Using questionnaires answered by entrepreneurs who have just created their business, we evaluate the characteristics of entrepreneurial motivation (needs and their intensities), identify the antecedents liked to this attitude, and isolate the entrepreneur logics of action (imitation, innovation–adventure, reproduction, and innovation–valorisation). This study is supported by a theoretical framework that is the result of research on motivation and entrepreneurship. A series of causal relations are isolated and then tested. Analysis enables an ensemble of conclusions to be drawn on entrepreneurial motivation. Pathways of motivation lead to logics of action linked to innovative projects and explain the phenomenon of reproduction (or imitation) found in some entrepreneurs. Development objectives and a need for personal independence are identified at the beginning stages of entrepreneurial planning. Creators hope that their business will bring tangible financial and material results. Entrepreneurs are conscious that they must make a commitment across a range of dimensions for their organisation (managerial, commercial, etc.). In their quest for valorisation, entrepreneurs take risks, exploiting advantageous business contexts, thanks to their competences, and show a need for creativity. These two dimensions (competences and creativity) are associated with the objective of independence. The logic of reproduction is characterised by self-confidence (locus of control) and responds to the objective of business development.     

The Motivation of Entrepreneurs: Are Employed Managers and Self-employed Owners Different?

Are managers entrepreneurs? What motivates them to run a firm? Are managers different from self-employed firm owners? In which points do they differ? And why is it that they are different? The following article examines these questions based on a survey of German engineering firms in which managers and self-employed owners answer why they are motivated to run a firm and what hinders their firms from growing more rapidly.     

Early-stage business model experimentation and pivoting

Recent literature suggests entrepreneurs struggle to pivot—or fundamentally change aspects of their venture—due to identity-based resistance to change. Yet, when entrepreneurs receive negative feedback, overcoming this resistance may be important to pivoting their business model. We adopt a convergent, mixed methods research design to explore when and why some entrepreneurs overcome resistance to change in response to negative feedback during early-stage business model experimentation. Building upon qualitative data that we gathered and analyzed, we theorize entrepreneurs may resist pivoting their value proposition relative to other business model components despite receiving negative feedback on this aspect of their business model. However, we find three factors – entrepreneurial experience, startup mentoring, and team size – may enable entrepreneurs to pivot in response to negative feedback. We theorize that these factors broaden a startup team's perspective, enabling value proposition pivoting during early-stage business model experimentation. We test these relationships with quantitative data from 80 startups engaged in business model experimentation and find support across hypotheses. We contribute to understanding when and why entrepreneurs pivot aspects of their business models in response to negative feedback during early-stage business model experimentation.Executive summaryThe entrepreneurship literature suggests startups may benefit from experimentation and pivoting different parts of their business model in response to negative feedback from stakeholders (Andries et al., 2021; Camuffo et al., 2020; Shepherd and Gruber, 2021). In early stages of starting a new venture, a business model refers to a cognitive schema or belief about an activity system that could potentially create and capture value (Massa et al., 2017; Shepherd and Gruber, 2021). Business model experimentation is the process of testing assumptions underlying this potential business model and pivoting business model assumptions in response to negative feedback (Andries et al., 2013; McDonald and Eisenhardt, 2020; Leatherbee and Katila, 2020). Building upon prior literature, we define business model pivoting as a fundamental change to parts of the business model (Berends et al., 2021; Snihur and Clarysse, 2022; Shepherd and Gruber, 2021). Yet, literature also suggests founders often struggle to pivot assumptions despite negative feedback. Motives to preserve and protect certain assumptions relevant to founders' identities can interfere with pivoting (Grimes, 2018; Kirtley and O'Mahony, 2023; Zuzul and Tripsas, 2020). Despite the general understanding that founders struggle to change their ideas, however, the entrepreneurship literature currently lacks precise insight into when and why founders can overcome resistance to pivoting.In this research, we explore when and why startups pivot different parts of their business model. We do so within the context of early-stage business model experimentation, where founders explicitly state assumptions about different parts of their potential business model, test those assumptions against stakeholder feedback, and are encouraged to pivot business model components in response to negative feedback. Through a mixed methods research design, we find (1) founders tend to resist pivoting their value propositions relative to other parts of a business model in response to negative feedback; and (2) entrepreneurial experience, startup mentoring, and team size enables startups to overcome this resistance to pivoting in response to negative feedback. We theorize these factors broaden founders' perspectives (Warshay, 1962), contributing to a greater willingness to pivot during experimentation.We contribute to the literature on entrepreneurial pivoting by explaining nuanced variation in pivoting distinct business model components during experimentation. This contribution is important because it reveals that resistance to pivoting the business model may be more complex than previously thought. We also contribute to the literature at the nexus of business model experimentation and entrepreneurial cognition by finding that entrepreneurial experience, startup mentoring, and team size enable startups to pivot despite psychological resistance to pivoting in response to negative feedback because it broadens founders' perspectives. This insight is important theoretically because it advances what we know about enabling experimenting with business models under conditions of uncertainty. The research presented here has clear and important implications for practice. This research suggests founders often resist changing the value proposition versus other components of their business models in early stages of venture development. This resistance can impede experimentation and pivoting in response to negative feedback. To the extent founders want to broaden their perspective to enable pivoting their value propositions in response to negative feedback during early stages of venture development, our data suggest they may be able to do so by recruiting members with entrepreneurial experience on their team (or gain entrepreneurial experience themselves), engage frequently with startup mentors, and increase the size of their team. Overall, we view the breath of perspective that comes from experience and interactions with others as an advantage for entrepreneurs when experimenting with their business models during early stages of venture development.     

Determinants of satisfaction for entrepreneurs

This study considers the extent to which entrepreneurs are satisfied with their businesses in their third year of business ownership. Entrepreneurial satisfaction might be viewed as a basic measure of performance. It may bear upon decisions by individual entrepreneurs about whether to invest more time and money, whether to cut back, or whether to close down. It may also influence whether entrepreneurs work effectively with their customers and employees. For researchers, the investigation of why, in particular settings, some entrepreneurs may be more satisfied than others may aid in the interpretation of past research, which has used this as a performance measure.This research draws upon a theoretical framework used in investigations of employee satisfaction. Called discrepancy theory, it suggests that individual satisfaction is determined, in part, by whether there is a “gap” between actual rewards or performance and the individual's goals or expectations.In this research, it was hypothesized that entrepreneurs emphasizing primarily noneconomic goals (such as doing the work they wanted to do) would have higher satisfaction when the business was experiencing lower levels of performance. For higher levels of performance, there would be no difference. In essence, the satisfaction of those emphasizing economic goals would vary more with economic performance. A related hypothesis was that, for this sample of start-up firms (many of which would be experiencing low levels of performance), those emphasizing noneconomic goals would have higher average levels of satisfaction. This was based upon the expectation that many start-up firms would be experiencing marginal performance, so that the “gap” between goals and performance would be greater for economically oriented entrepreneurs. The research also focused upon expectations, because one aspect of discrepancy theory suggests that satisfaction decreases if there is a gap between expectations and performance. Accordingly, it was hypothesized that, controlling for performance, entrepreneurs with higher initial expectations would subsequently have lower levels of satisfaction. Previous research suggests that membership in particular demographic groups may influence expectations. This led to hypotheses that older entrepreneurs, female entrepreneurs, and minority entrepreneurs would have lower levels of initial expectations. This, in turn, may influence later satisfaction. Thus, it was hypothesized that, controlling for performance, entrepreneurs in each of these groups would have higher satisfaction because their initial expectations would be lower. The study utilized a sample of 287 entrepreneurs who were followed over a 3-year period. The data on predictors of satisfaction were gathered in year 1, when the average owner had been in business for 11 months. The satisfaction measures were gathered 2 years later. By that time there should have been some stabilization in the routines of the business, and the entrepreneur could reflect upon historic performance and experiences in judging the extent to which business ownership had been satisfying. The data were analyzed primarily using path analysis, in which it was hypothesized that certain variables would have both direct and indirect effects upon satisfaction.It was found that the satisfaction of entrepreneurs emphasizing economic goals was not more sensitive to economic performance, at least within the range of performance considered in this sample. For this group of firms, many of which appeared to be experiencing marginal performance, those emphasizing noneconomic goals did express higher levels of satisfaction. It had been expected that those with higher initial expectations would later be less satisfied because they would have a greater expectation-performance gap. However, the opposite was found; those who were more optimistic initially were more satisfied later, even when controlling for performance. Demographic influences on initial expectations were examined. Contrary to expectations, none of the demographic traits was significantly related to initial assessment of likelihood of success. Older entrepreneurs, women entrepreneurs, and minority entrepreneurs were just as optimistic as those in other groups. The relationship between membership in these demographic groups and later satisfaction was also examined. No significant relationships were found for older entrepreneurs and minority entrepreneurs. However, there was some evidence (p = .07) that women entrepreneurs were more satisfied with business ownership.Two of the most interesting findings were those related to initial expectations and to women entrepreneurs. Contrary to discrepancy theory, those who had higher initial expectations were later more satisfied, not less. This may suggest, as Staw and Ross (1985) found in a longitudinal study of employee satisfaction, that attitudes are, in part, a function of stable individual traits. Those who had a positive view of their initial prospects later viewed the experience of business ownership more favorably, regardless of subsequent performance. For women entrepreneurs, the higher levels of satisfaction may reflect a view that they have fewer attractive alternatives; it may also be that they discover greater relative satisfaction from the day-to-day aspects of business ownership.For entrepreneurs and their advisors, the findings suggest that particular goals, attitudes, and backgrounds are likely to be associated with greater satisfaction. This may influence whether entrepreneurs stay with marginal businesses. For researchers, the study provides insight into discrepancy theory by considering its application to entrepreneurs rather than the hired employees normally studied. In addition, subjective measures of performance, such as satisfaction, have often been used in previous research on entrepreneurial performance. This study casts light on why, in particular settings, some entrepreneurs may be more satisfied than others.