The evolution of founder identity as an authenticity work process

Research has shown founders' identities have a significant impact on their ventures. Yet, the process through which founder identity evolves and takes shape remains relatively unexplained. This paper explores the evolution of founder identity through a qualitative study of first-time sustainable entrepreneurs, and their stakeholders, over a three years period. Our analysis revealed the importance of personal identity, the aspect of the self that defines a person as a unique individual based largely on values and beliefs. We found that first-time founders sought to align their personal identity with their evolving founder identity over time. Based on these findings we theorize a process model of founder authenticity work, defined as the activities founders engage in to feel and seem authentic while engaged in entrepreneurial action. This study thus details the significance of personal identity as a guidepost for founder identity evolution, complementing extant founder identity studies focused on role and social identities. In addition, our analysis enriches the current conceptualization of authenticity in entrepreneurship research by linking it to validation of personal identity and highlighting its negotiated nature in the evolution of authentic founder identities.     

Factors influencing the choice between founder versus non-founder CEOs for IPO firms

Despite the innate advantage founder CEOs have by virtue of their founding vision, organizational influence, positive image, and ownership stakes to lead their firms at their initial public offering (IPO), extant empirical evidence indicates that between a third to half of IPO firms go public with non-founder CEOs at the helm. Relatively little however, is known regarding factors that influence the choice of founder versus non-founder CEO for firms issuing IPOs. This study examines the impact of factors such as founder characteristics, size of founding team, governance structure, ownership structure, top management team independence, venture capitalist influence, and the demand for equity financing on the probability of founder CEO at IPO.     

Preparing for scaling: A study on founder role evolution

One of the major entrepreneurial challenges faced by scaling firms involves changing their internal organization. Our study focuses on a particular aspect of internal organizing—namely, how founder roles evolve in preparation for scaling. By means of an in-depth case study and a combination of data collection methods, we study the evolution of formal and informal founder roles. For both types of roles, we identify a founder-driven and an interaction-driven phase, during which founder and/or joiner role-crafting take place. Through both types of role-crafting, founder roles are (re)shaped. Particularly unique to our study is that we identify three scaling-specific paths through which the role-crafting of joiners shapes founders' roles. Specifically, founders experience a role efficiency increase as they take over some of the joiner-introduced role behaviors, or a role set decrease as joiners take over some of their (formal or informal) roles. We further point to the importance of psychological safety and value fit for successful joiner role-crafting to occur and for founder roles to change following founder-joiner interactions. Our study adds to the literatures on scaling and entrepreneurship as well as to role theory and role-crafting literature.     

The experience of the founder and self-employment duration: a comparative advantage approach

This paper investigates how the initial experience of a founder affects self-employment duration in a competing risks setting. The analysis uses survey data that provide new perspectives on the role of the founder??s experience. The analysis concentrates on the importance of a balanced skill set for self-employment duration. The results show that most self-employed individuals find themselves unemployed upon ending their self-employment. Firm-level characteristics are less significant in explaining self-employment duration, while experience and motivation appear to be driving forces for self-employment longevity. The findings support the importance of combined practical experience and adequate skills. Having broad experience combined with competence in sales/business is one of the most important factors for self-employment duration. Contrary to most other studies, the results show that previous self-employment experience is associated with early exits.     

Identity (Re)construction through sharing: A study of mother and teenage daughter dyads in France and Japan

We use the transitional and liminal stage when daughters enter adolescence to investigate how sharing practices within families are employed as a resource in identity work. We show the importance of “sharing in” within some French dyads, as a means for discovering new life projects and for rediscovering past identity projects driven by self-expressive motivations. In contrast, Japanese dyads are often reluctant to share personal possessions (sharing out) in order to maintain hierarchical relationships (affiliation motivations) and remain fashionably up-to-date (self-expressive motivations) in their identity work, and in their drive to maintain and prolong their mothering role. In order to better target adolescent girls’ mothers, retailers could develop more clothing appeals based on inter-generational approaches in France and intra-generational approaches in Japan.     

Giving up the hats? Entrepreneurs' role transitions and venture growth

At the start of a venture, most entrepreneurs wear many hats. However, entrepreneurs often cannot remain involved in every aspect of the venture process, and so they face important decisions about which roles to give up, which roles to retain, and which new roles to adopt. For many, this process is particularly difficult as roles represent more than just something entrepreneurs do but also an important part of who they are (role identities). Through an inductive field study, this research reveals how and why entrepreneurs add, subtract, or retain roles. We find three mechanisms—perceiving the entrepreneur as someone who ‘gives up the hats,’ discovering new meaning (new role identities) within the venture, and role identity imprinting—lead to a narrowing of one's role set, which ultimately influences venture growth.     

Does founder ownership affect foreign investments? Evidence from India

We study the effect of founder ownership on foreign investments for Indian firms. We show that foreign investors underinvest in firms with higher level of founder ownership, since these firms are more vulnerable to information problems and expropriation risk. This effect is particularly stronger when founder ownership exceeds a threshold beyond which founders hold effective control on firms. We exhibit that information problems are the main cause of the relation between foreign investments and founder ownership. This is because the relationship is more pronounced in case of business group firms and firms that are engaged in more earnings management.     

Building entrepreneurial tie portfolios through strategic homophily: The role of narrative identity work in venture creation and early growth

In this article, we present the results of a case study of an entrepreneur who successfully founded and grew a venture underpinned by a portfolio of strongly homophilous, dyadic ties. Building on our case, we discuss how the entrepreneur strategically constructed these ties through a form of narrative identity work, explore the shared identity narratives that he used to do so, and highlight the heterogeneous nature of the resulting tie portfolio. We go on to explore the factors that motivated the entrepreneur to purposefully construct an entrepreneurial tie portfolio in this way. Building on our findings, we discuss the nature of narrative identity work and its role in creating homophilous ties, explore the connection between the resulting shared identity narratives and trust, and discuss the central role of values in strategic homophily.     

Obsessive passion and the venture team: When co-founders join,and when they don't

We investigate how potential co-founders' perceptions of a founder's obsessive passion (OP) influence the decision to join a venture team. Using a conjoint experiment with a primary sample of 116 founder-entrepreneurs and validating it with an additional sample of 59 founder entrepreneurs, we found that potential co-founders were more likely to join if they perceived that the founder had OP for developing ventures. Potential co-founders were less likely to join if they perceived OP for founding ventures. Further, we found significant interactions between perceived OPs, as well as interactions between perceived OP and potential co-founders' own OP.     

Navigating compromise: How founder authenticity affects venture identification amidst organizational hybridity

Founders of hybrid ventures encounter organizational tensions that can compel compromise in both their organizations' and their own personal values. Such compromises may, in turn, undermine founders' identification with their ventures. In a multi-case study analysis we examine why social entrepreneurs differ in their responses to organizational tensions, both at the firm- and individual-level, and how such differences relate to their venture identification. Specifically, our findings reveal that strategic decisions made in the context of values-based complexity are often accompanied by concerns regarding founder authenticity—that is, judgments about the alignment between founders' actions and the commitments or responsibilities associated with their identities as entrepreneurs. Yet, because founders differ in the basis from which they seek to maintain such alignment, these differences shape both hybridity management and subsequent venture identification. By unpacking such differences, our findings contribute new theory, bridging recent scholarship on founder authenticity with longstanding research on organizational identification and hybrid organizing.     

Forging meaningful consumer-brand relationships through creative merchandise offerings and innovative merchandising strategies

This research highlights the importance of retailer-consumer identity congruence – the match between the retail brand identity and the consumers’ identity. Retailers can leverage identity congruence to forge meaningful consumer-brand relationships which will result in enhanced engagement, brand loyalty, and willingness to pay. The paper discusses how creative merchandise offerings and innovative merchandising strategies contribute to the creation of a unique retail brand identity and facilitate communication of this identity to consumers. Based on interviews with retail practitioners, we formulate five ways in which retailers can establish and communicate their brand identity through creative merchandise offerings (by focusing on unique and original merchandise, leveraging local merchandise to reflect the area, making their merchandise akin to art, offering sustainable merchandise, and a high fashion product assortment). In addition, we focus on five innovative merchandising strategies which help the retailer connect the brand to the customer (creating themes, reflecting the brand story, being playful, signaling exclusivity, and virtual merchandising). We then discuss how retailers can utilize social and technological tools to amplify the retailer identity to consumers, thus increasing the likelihood that a consumer will view their identity congruent with the retail brand.     

R&D investments in family and founder firms: An agency perspective

Investments in R&D can influence a firm's ability to develop new products and to create and adopt innovative technologies that may enhance productivity. However, due to uncertainty regarding the outcome, investments in R&D may lead to an agency problem between the owners and the managers of a firm. Family and founder firms are often considered to be different in their agency situation than other firms, which may have an influence on R&D investments. This paper analyzes R&D spending in family and founder firms versus other firms. The results show that while family ownership decreases the level of R&D intensity, ownership by lone founders has a positive effect not only on R&D intensity but also on the level of R&D productivity. The paper contributes to the understanding of the role of entrepreneurship in making high risk/high return R&D decisions.     

Learning “who we are” by doing: Processes of co-constructing prosocial identities in community-based enterprises

This study investigates how members in community-based enterprises (CBEs) engage in processes of co-constructing their collective prosocial identities. Based on an inductive analysis of 27 organizations that were formed explicitly as communities and sought to build alternative forms of production and consumption through innovative ways to pool and recombine resources, we found that all of the CBEs engaged in distributed experimentation that lead to epiphany sense-making. These two approaches triggered and enacted collective processes of shifts in identity or identity persistence. We advance a processual model that identifies approaches for how members of CBEs either embrace epiphanies in identity shifts or limit and react to epiphanies in identity persistence.     

From iconic business leader to Russian icon museum founder: Bridging business and the arts across cultures

This case study portrays Gordon Lankton, a highly successful U.S. executive who, drawing upon the relationships he had built during two decades of doing business in Russia, succeeded in having Moscow's renowned State Tretyakov Gallery lend priceless icons to his new museum in a small Massachusetts town. We demonstrate how a charismatic and gently determined executive‐turned‐museum founder exhibited transformational leadership while bridging business and the arts across cultures. The case study includes an interview with Gordon Lankton and is followed by a commentary that features an interview with Kent dur Russell (the Museum of Russian Icons curator) and a strengths, weaknesses, opportunities, and threats (SWOT) analysis of Lankton's leadership style. © 2010 Wiley Periodicals, Inc.     

Prêt-à-quitter: Career mobility and entrepreneurship in the global high-end fashion industry

We test a general model of career mobility and entrepreneurship based on the premise that job transitions between organizations are influenced by the unique role of the organizational founder. Three related ideas inform our inquiry. First, individuals in that role are endowed with the right to act as representatives of their organizations which increases commitment and deters external mobility. Second, the founder role, because of its uniqueness, defines how entrepreneurs think of themselves thus aligning person and position. Repeat entrepreneurship occurs because after a founder leaves, this alignment is disrupted and the need to restore it leads to becoming a founder again. Third, we see the founder role as imbued with charismatic authority. This creates an aura of deference and a propensity to emulate the founder that inspires organizational members working alongside the founder to themselves become entrepreneurs. We investigate these ideas empirically in the context of the global high-end fashion industry through a research design that allows us to compare leading designers' career histories as both founders and members and their transitions to and out of entrepreneurship.     

Gender discrimination and lending to women: The moderating effect of an international founder

Much of the microfinance rhetoric revolves around fighting female poverty, which is often the result of discriminatory gender norms. Also, the microfinance industry has always been influenced by foreign actors, who, according to the literature, promote women’s empowerment. Yet, little is known about how microfinance institutions’ (MFIs) outreach to women is affected by the interplay between societal norms and the actions of these foreign actors. In response, this study draws on two streams of institutional theory, institutional logics perspective and institutional work theory, to investigate the influence of gender discrimination on microfinance outreach to women and to test the moderating effect of an international founder. Using data on 213 MFIs from 65 countries, the results show that gender discrimination negatively impacts microfinance outreach to women, but that the negative effect is mitigated by having an international founder. These findings are discussed, and several avenues are opened for future research.     

Crowded identity: Managing crowdsourcing initiatives to maximize value for participants through identity creation

In this article, we consider crowdsourcing from the consumer perspective. Specifically, we examine the identity value (i.e., sense of self) that consumers accrue by participating in creative crowds. How can managers structure crowdsourcing initiatives to maximize value for participants through identity creation and expression? We strive to answer this question first by examining the different types of crowdsourcing initiatives from a value co-creation perspective. Then we evaluate how consumers construct identities through consumption and review the literature on identity theory. Finally, we link the identity type—personal, extended, or social—to the management of crowdsourcing ventures and offer suggestions for practitioners.     

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.     

Will the startup succeed in your eyes? Venture evaluation of resource providers during entrepreneurs' informational signaling

Experienced founders and investors are arguably the venture community members most likely to possess needed financial and social resources for startups. We present a model of venture evaluation where entrepreneurs solicit these resource providers for needed financial and social resources. Our model addresses how resource providers' venture investment propensity influences their evaluation of entrepreneurs' informational signals and how their venture evaluation predicts their willingness to provide financial and social resources. We test our model using real-time decisions and find resource providers with founding experience (both non-investor founders and investors with founding experience) leverage their investment propensity more than non-founder investors when evaluating new ventures. In addition, our post-hoc analysis reveals that resource providers' founding experience is associated with their willingness to confer social resources. Overall, this paper focuses on the perspective of resource providers and addresses how their investment propensity, types of venturing experience, and venture evaluation influence their willingness to render resource support to new ventures.     

A double-edged sword? Founder Teams' Prior International Experience and INV International Scale-up

We examine the effect of international new ventures’ (INVs) congenital knowledge inherited from their founding teams vs. their experiential knowledge gained through learning by doing on the initiation vs. continuation of their international growth. Data from 144 technology INVs show that the effect of congenital knowledge fades as experiential knowledge accrues over time and fuels sustained international growth. The relationships are moderated by whether founder teams’ work experience is in the same or a different industry as the INV as well as the level of external funding received by the INV. Our study and results contribute to the literature on INVs’ post-entry internationalization.