The Effects of Initial Location,Aspirations, and Resources on Likelihood of First Sale in Nascent Firms*

The formation of a new venture includes initial choices that affect the process of start‐up. Primary among these decisions is the choice of location whether to start from home or from an away location. This paper examines the impact of initial firm location choices and aspirations of the entrepreneur on the resource assembly process and the likelihood of first sale. Results show that home‐based businesses assemble different types of resources from their away‐based counterparts. Higher aspirations were associated with greater accumulation of organizational resources. The combined influence of location and aspirations showed that home‐based firms with high aspirations were less likely to achieve first sale. A post hoc analysis examined these affects within a subgroup of service firms and confirmed the previous results. This study suggests that in the initial stages of the new venture, there are processes and routines that home‐based businesses engage in that lead them to achieve first sales in a timelier manner than those businesses that are located away from home. Furthermore, high aspirations are associated with greater scale of organizational resources but not necessarily with achievement of sales. Implications are discussed.     

Properties of emerging organizations: An empirical test

The process of new venture creation is central to the field of entrepreneurship. The effects of initial organizing have a direct influence on survival, yet empirical examination of the dimensions of emergent organizations is limited. Using longitudinal data on nascent entrepreneurs, this paper empirically tests four properties of emerging organizations-intentionality, resources, boundary and exchange- and their effect on likelihood of continued organizing [Katz, J., Gartner, W.B., 1988. Properties of emerging organizations. Academy of Management Review 13(3), 429–441]. Our results suggest that all four properties are necessary for firm survival in the short-term and those firms that organize more slowly are more likely to continue to organize. Further, nascent ventures in which intentionality preceded the other organizing properties were not significantly more likely to continue in the organizing effort. Our results suggest an extension of the original Katz and Gartner [Katz, J., Gartner, W.B., 1988. Properties of emerging organizations. Academy of Management Review 13(3), 429–441] framework.     

Start‐up Motivations and Growth Intentions of Minority Nascent Entrepreneurs

Firm growth is widely considered to be a measure of success for entrepreneurial businesses. Data indicate that there are systematic differences between minority and nonminority‐owned firms with respect to growth. Black entrepreneurs are 50 percent more likely to engage in start‐up activities than white entrepreneurs, however, black‐owned firms are smaller and less profitable than their white‐owned counterparts. Following the effort–performance–outcome–logic of expectancy theory and using data from the Panel Study of Entrepreneurial Dynamics (PSED), our paper investigates the differences between black and white entrepreneurs' motivations to start and intentions to grow a new venture. Findings indicate that there are significant differences in motivations between black and white entrepreneurs both in starting and in their intentions to grow the new venture. Implications for future research are discussed.     

Pioneering strategies for entrepreneurial success

Entrepreneurs are, by definition, pioneers in that they innovate new products/services, create new processes, open new markets, or organize new industries. Dramatic changes in the global environment suggest that successful entrepreneurs must master three key strategies: (1) develop a clear vision; (2) manage cash creatively, or learn to “bootstrap”; and (3) be able to persuade others to commit to the venture using social skills. This article discusses pioneering strategies and offers guidance on how to implement these.     

High‐Growth Women’s Entrepreneurship: Fueling Social and Economic Development

High‐growth firms, often referred to as “gazelles,” are equated with entrepreneurial success and celebrated as the key to growing economies, and women’s entrepreneurship is a vehicle of economic and social development. This special issue publishes papers that address the general lack of research on high‐growth women’s entrepreneurship. In this introduction paper, we offer an adapted framework for the factors driving high growth across multiple levels: individual (entrepreneur and entrepreneurial team characteristics), venture (strategy, organizational structures, and systems), resources, location, and environment. We also introduce the papers in this special issue and present an overview of the contributions to this issue.     

Properties of emerging organizations: empirical evidence from Norway

The process of new venture creation is of central importance to entrepreneurship. The effects of initial organizing have a direct effect on survival, yet empirical examination of the dimensions of emerging organizations is limited. Using longitudinal data on 203 nascent entrepreneurs from Norway over the course of four years (1996?C1999), this paper empirically tests four properties of emerging organizations??intentionality, resources, boundary, and exchange??and their effect on the likelihood of continuing the organizing effort (Katz and Gartner, Acad Manage Rev 13(3):429?C441, 1988). Consistent with previous research, our results suggest that organizations which engage in a greater number of organizing activities are more likely to continue the organizing effort. In addition, intentionality, boundary, and exchange are positively associated with organizational emergence, whereas resources are a necessary, but not sufficient, condition for organizations to continue organizing. The concentration of organizing activities is also positively associated with the likelihood of continuing the organizing effort.     

Analysing the determinants of performance of best and worst European banks: A mixed logit approach

Using a dataset of 7635 observations on 1384 commercial banks operating in the EU between 1993 and 2001, we utilise a mixed logit model to identify factors that explain the probability of a bank being a best [worst] performer. The empirical evidence confirms the importance of country-level characteristics (location and legal tradition), and firm-level features (bank ownership, balance sheet structure and size). Specifically, smaller sized banks with higher loan-intensity, and foreign banks from countries upholding common law traditions have a higher probability of best performance.     

Pathways to entrepreneurial growth: The influence of management, marketing, and money

Business growth is considered a worthy goal for firms and a measure of entrepreneurial success, as well as important for economic development. Why some firms grow and others do not, though, remains a subject of debate. Of the small proportion of firms that do grow, it is often assumed that they follow a similar growth trajectory and/or encounter certain stage thresholds; however, the evidence base on this is wanting. The new study of business growth presented here provides an in-depth analysis of 19 New England-based firms. Our findings reveal that fast-growing companies exhibit different rates and patterns of growth: some display rapid growth trajectories (Rapid Growth Pattern); some, slower, more measured rates (Incremental Growth Pattern); others, episodic periods of quick growth followed by sharp retrenchment (Episodic Growth Pattern); and, while no firm actively chose to stop growing, some reached points of stagnation (Plateau Growth Pattern). We found that three key factors—management, marketing, and money—affected company growth across these patterns. While not every factor was critical at each moment of growth for each firm, every entrepreneur cited the relative importance of each factor at some time during the growth of their firm. Thus, fast-growing firms do not grow in the same manner, at the same rate, or with the same outcomes. This article has implications for those seeking to understand the processes of development and patterns of fast-growth businesses.