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Entrepreneurial learning and the role of venture capitalists

Published on Jul 1, 2007in Venture Capital: An International Journal of Entrepreneurial Finance
· DOI :10.1080/13691060701324445
Henrik Berglund13
Estimated H-index: 13
(Chalmers University of Technology),
Tomas Hellström19
Estimated H-index: 19
(University of Oslo),
Sören Sjölander7
Estimated H-index: 7
(Chalmers University of Technology)
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Abstract
This paper develops a model of entrepreneurial learning in order to explain how VCs support the process of entrepreneurial learning and thereby add value to their ventures. We draw on two generic approaches to learning, termed the hypothesis-testing mode and the hermeneutic mode, which turn out to be closely interrelated in such learning processes. The resulting model comprises four categories, which focus on what entrepreneurs learn and how it is learnt: experimentation, evaluation, unreflective action and unverified assumptions. We then use these analytical categories to illustrate how VCs apply their different forms of expertise to increase a venture's value once an investment has been made.
  • References (63)
  • Citations (22)
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References63
Newest
Published on Mar 1, 2006in Strategic Management Journal5.57
James G. March65
Estimated H-index: 65
(Stanford University)
Technologies of model-based rationality are the core technologies of strategic management, having largely replaced earlier technologies that placed greater reliance on traditional practice or on communication either with the stars or with the gods. The technologies used by organizations in their pursuit of intelligence can be imagined to change over time as a result of responding to the successes and failures associated with the technologies. Although technologies of rationality seem clearly to ...
Published on Feb 1, 2006in Academy of Management Perspectives3.86
Robert A. Baron53
Estimated H-index: 53
(RPI: Rensselaer Polytechnic Institute)
Executive Overview How do entrepreneurs identify opportunities for new business ventures? One possibility, suggested by research on human cognition, is that they do so by using cognitive frameworks they have acquired through experience to perceive connections between seemingly unrelated events or trends in the external world. In other words, they use cognitive frameworks they possess to “connect the dots” between changes in technology, demographics, markets, government policies, and other factor...
Published on Jan 1, 2006
Henrik Berglund13
Estimated H-index: 13
Much entrepreneurship research explicitly or implicitly employs positivistic methods where theoretical concepts and the ‘things’ we encounter in the world are treated as unequivocally given. While important such approaches tend to bracket many animated aspects of human being and behaviour commonly associated with entrepreneurship. To offer an alternative this chapter introduces the phenomenological tradition through the philosophies of Edmund Husserl and Martin Heidegger. Phenomenology problemat...
Published on Dec 1, 2005in Scandinavian Journal of Management1.42
Saras D. Sarasvathy33
Estimated H-index: 33
(UVA: University of Virginia),
Nicholas Dew24
Estimated H-index: 24
(NPS: Naval Postgraduate School)
Several years ago Professor March pointed out that rational choice involves two guesses, a guess about uncertain future consequences and a guess about uncertain future preferences, and called for the development of a technology of foolishness to complement the technologies of intelligence that have been developed to improve the first guess. In this essay we use empirical data from two separate studies of entrepreneurial expertise, one involving the creation of new ventures and the other the birt...
Published on Sep 1, 2005in Harvard Business Review5.69
Donald N. Sull15
Estimated H-index: 15
Huge business opportunities are rare, and their timing is almost never under the control of an individual company. So it's important to be ready when they come and to manage smart during the long periods of business as usual.
Published on Jul 1, 2005in Kyklos1.67
Milo Bianchi9
Estimated H-index: 9
(University of Toulouse),
Magnus Henrekson32
Estimated H-index: 32
(Research Institute of Industrial Economics)
We review and evaluate some recent contributions on the modeling of entrepreneurship within a neoclassical framework, analyzing how and to what extent the fundamental ingredients suggested in the social science literature were captured. We show how these approaches are important in stressing the main elements of a complex picture without being able to completely describe it. However, each modeling attempt focuses only on one specific feature of entrepreneurship. The entrepreneurial function broa...
Published on Jul 1, 2005in Organization Science3.26
Karl E. Weick63
Estimated H-index: 63
(UM: University of Michigan),
Kathleen M. Sutcliffe42
Estimated H-index: 42
(UM: University of Michigan),
David Obstfeld8
Estimated H-index: 8
(UCI: University of California, Irvine)
Sensemaking involves turning circumstances into a situation that is comprehended explicitly in words and that serves as a springboard into action. In this paper we take the position that the concept of sensemaking fills important gaps in organizational theory. The seemingly transient nature of sensemaking belies its central role in the determination of human behavior, whether people are acting in formal organizations or elsewhere. Sensemaking is central because it is the primary site where meani...
Published on Apr 1, 2005in Harvard Business Review5.69
Fernando F. Suarez18
Estimated H-index: 18
(NU: Northeastern University),
Gianvito Lanzolla7
Estimated H-index: 7
(Lond: University of London)
First-mover advantage is more than a myth but far less than a sure thing. Here's how to tell when it's likely to occur- and when it's not.
Published on Jan 1, 2005in Journal of Business Venturing6.33
Dimo Dimov23
Estimated H-index: 23
(IE University),
Dean A. Shepherd72
Estimated H-index: 72
(CU: University of Colorado Boulder)
Using a human capital perspective, we investigated the relationship between the education and experience of the top management teams of venture capital firms (VCFs) and the firms' performance. We found that although general human capital had a positive association with the proportion of portfolio companies that went public [initial public offering (IPO)], specific human capital did not. However, we did find that specific human capital was negatively associated with the proportion of portfolio co...
Hans Sjögren9
Estimated H-index: 9
(Linköping University),
Marcus Zackrisson1
Estimated H-index: 1
(Office of Science and Technology)
The pecking order theory states that firms choose financing in the following order: internal finance-debt-equity. However, most of the research has been conducted on larger (publicly-listed) firms. This article presents a unique empirical material on the financing of high technology small firms (HTSFs) in Linkoping, Sweden and Santa Clara County, USA. The data reveals how firms are financed and their preferences for different financial sources. Whilst traditional financial theory and pecking ord...
Cited By22
Newest
Published on Oct 1, 2018in British Journal of Management2.75
Timo Braun4
Estimated H-index: 4
(FU: Free University of Berlin),
Aristides I. Ferreira11
Estimated H-index: 11
(ISCTE-IUL: ISCTE – University Institute of Lisbon)
+ 1 AuthorsJoerg Sydow11
Estimated H-index: 11
(FU: Free University of Berlin)
Giustina Secundo11
Estimated H-index: 11
,
Pasquale Del Vecchio8
Estimated H-index: 8
+ 1 AuthorsGiuseppina Passiante12
Estimated H-index: 12
Purpose The purpose of this paper is to explore how collaborative entrepreneurial learning (EL) processes between entrepreneurs and university students can enhance the entrepreneurial practices in the context of knowledge-intensive enterprises. These learning processes represent a valuable source for entrepreneurship development in incumbent enterprises in the forms of innovative products, services, processes or organizational renewal. Design/methodology/approach An extreme case study is the pro...
Giustina Secundo11
Estimated H-index: 11
(University of Salento),
Giovanni Schiuma23
Estimated H-index: 23
(University of Basilicata),
Giuseppina Passiante12
Estimated H-index: 12
(University of Salento)
Purpose The purpose of this paper is to present an overview of the articles presented in the special issue “Entrepreneurial learning dynamics in knowledge-intensive enterprises.” The special issue is inspired by recent research on entrepreneurial learning dynamics in knowledge-intensive enterprises literature. The aim is to extend and consolidate this emerging research area exploring entrepreneurship as a never-ending dynamic learning process, as well as, to cross-fertilize entrepreneurship and ...
Published on Jan 1, 2017
Giustina Secundo11
Estimated H-index: 11
(University of Salento),
Pasquale Del Vecchio8
Estimated H-index: 8
(University of Salento)
+ 1 AuthorsMirco Paoletto
Are Branstad2
Estimated H-index: 2
(Vestfold University College),
Alf Steinar Sætre9
Estimated H-index: 9
(NTNU: Norwegian University of Science and Technology)
Purpose – Corporate incubation is a type of business incubation designed to assist small firms to develop using know-how available in large companies. The purpose of this paper is to explicate how incubation services can be co-produced and describe the contributions and conditions influencing learning and firm development. Design/methodology/approach – The study used a longitudinal single-case method to analyze a small firm’s development process during four years of incubation. The authors recor...
Swati Panda3
Estimated H-index: 3
,
Shridhar Dash4
Estimated H-index: 4
(Indira Gandhi Institute of Development Research)
Maintaining cooperation and avoiding opportunism is essential for a healthy Venture Capitalist (VC)-entrepreneur relationship. Therefore, the purpose of this paper is to explore the role of control and trust for developing a cooperative VC-Entrepreneur relationship in an agency environment in the Indian context. The study adopts a multiple case study approach to investigate 10 VC-Entrepreneur dyads. It uses data collected from both primary and secondary sources. Content analysis was used as the ...
Shuangshuang Kong1
Estimated H-index: 1
(U of O: University of Ottawa),
Miwako Nitani3
Estimated H-index: 3
(U of O: University of Ottawa),
Allan Riding14
Estimated H-index: 14
(U of O: University of Ottawa)
Over the last few years, growth in the flow of venture capital (VC) in Canada has been driven primarily by increased reliance on foreign, primarily US, investors This is a situation that is not unique to Canada. Other countries (for example, Ireland and several EU nations) have small domestic VC stocks but are geographically situated near countries with relatively large stocks of VC. This paper reports research that shows this to be a mixed blessing. On the one hand, foreign investors make relat...
Samuel Adomako5
Estimated H-index: 5
(Warw.: University of Warwick),
Albert Danso6
Estimated H-index: 6
(Ebor: University of York),
John Ofori Damoah3
Estimated H-index: 3
(Central University College)
The literature on access to finance has confirmed a positive relationship between access to finance and firm growth. Yet the boundary conditions for such linkage are less examined in the context of developing economies. This study draws on resource-based view to introduce financial literacy as a moderator of the relationship between access to finance and firm growth. This theoretically derived research model is empirically tested using survey data from 201 small and medium-sized enterprises in G...
Published on Dec 18, 2015in Social Science Research Network
Luke Pittaway17
Estimated H-index: 17
(OU: Ohio University),
Louisa Huxtable-Thomas1
Estimated H-index: 1
(Swansea University),
Paul Hannon19
Estimated H-index: 19
(Swansea University)
This chapter summarizes the latest studies in entrepreneurial learning in order to highlight their implications for the design of educational programs (Pittaway & Thorpe, 2012). It examines in detail the latest thinking on the subject, summarizes the key concepts and empirical contributions with a particular focus on expanding understanding of ‘situated’, social and contextual learning (Lave & Wenger, 1991). The chapter stems from Pittaway and Thorpe’s (2012: 850) summary of Cope’s framework. He...