Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics

Why are some entrepreneurs able to start a new firm more quickly than others in the venture creation process? Drawing on pecking order and agency theory, this study investigates how start-up capital structure influences the time to either new firm founding or quitting the start-up process. The temporal aspect of the start-up process is one that is often discussed, but rarely studied. Therefore, we utilize competing risk and Cox regression event history analysis on a nationally representative sample of US entrepreneurs to investigate how start-up capital structure impacts the time in gestation to particular kinds of start-up outcomes. Our findings suggest that external equity has an appreciable impact on new firm emergence over time, and that the percentage of ownership held by the founders attenuates the benefits of external equity.

Adaptációra vállalkozni – avagy vállalkozói szerepek megjelenése a környezet és az alkalmazkodás viszonyában (Attempting to adapt – Entreprenurial roles in the adaptation process to environmental changes)

A szerző cikkében arra a kérdésre keresi a választ, hogy a kis- és középvállalkozások vezetőinek sajátos környezethez fűződő viszonyát alapul véve milyen vállalkozói szerepek azonosíthatóak a környezeti változásokra való reagálás során. A kutatás központi kérdése, hogy a vállalkozó miként tekint magára az adaptációra a turbulensen változó környezeti viszonyok között, és magának milyen szerepet szán az alkalmazkodási folyamat során. A cikk bemutatja a vállalkozó személyiségének alapvető vonásait, külön kitérve a vállalkozó vezető személyére, majd ezt követően az adaptáció legjellemzőbb formáit és tulajdonságait helyezi középpontba. A tanulmány 14 hazai kis- és középvállalkozás vezetőjével készített interjú feldolgozásával, valamint Hortoványi és Szabó (2006a) adaptációs stratégiai típusai alapján három kategóriát azonosít a környezetfelfogás és reagálás kontextusában. ______ This paper focuses on the role of the entrepreneur in the adaptation process, how we can determine the role of the entrepreneur to environmental changes and to strategic adaptation itself. The paper begins with the presentation of the entrepreneurial models, focusing on the entrepreneurial management afterwards continues with a brief summary of the adaptation approach to strategy. Emphasizing that adaptation to changes can vary as innovation or entrepreneurship is concerned. Proactivity presents an adaptation strategy and moreover can be related to entrepreneurial behaviour and therefore characterizes the viewpoint of the entrepreneur. Entrepreneurs have to react to the changing environmental with analysis and proactive reaction, as future and innovation orientation is an integrate part of their entrepreneurial personality. Examining 14 interviews made with Hungarian entrepreneurs the paper identifies three categories which determine the role of the entrepreneurs in the adaptation process.

Vállalkozói attitűdök kutatása egyetemi-főiskolai hallgatók körében (Research of students’ entrepreneurial attitudes)

Magyarország 2006-ban csatlakozott a Szt. Gallen-i Egyetem (Svájc) által koordinált (GUESSS Global University Entrepreneurial Spirit Students’ Survey) kutatáshoz, amely a hallgatók vállalkozásindítással kapcsolatos elképzeléseit és vállalkozási tevékenységét kérdőíves adatfelvétel segítségével vizsgálja. Az online megkérdezésnek köszönhetően Magyarország esetében 2011-ben 5 677 hallgató válaszai alapján értékelhették a szerzők a hallgatók vállalkozásindítási szándékát és azok legfontosabb alakító tényezőit. A kutatás nemzetközi jellegének köszönhetően eredményeik összevethetők a nemzetközi tapasztalatokkal is. A tanulmány bemutatja a nemzetközi kutatás célját, elméleti hátterét, a kérdőívet és a kérdezés folyamatát. A magyar adatbázis legfontosabb jellemzői mellett a szerzők ismertetik a vállalkozásindítási szándék, a főiskolai-egyetemi környezet nemzetközi összehasonlító adatait. _______ Hungary joined the GUESSS (Global University Entrepreneurial Spirit Students’ Survey) research project organized and led by the University of St. Gallen, Switzerland in 2006. GUESSS evaluated students’ entrepreneurial intentions and activities with the help of a questionnaire. In 2011 an online survey was conducted in Hungary, addressing 5.677 students. The students’ responses regarding their business start-up activities and intentions as well as the most important factors shaping them were evaluated. The international nature of the research allowed the authors’ to compare Hungarian results to international practices. This paper describes the purpose of the international research, its theoretical background, the questionnaire and the interview process. Apart from presenting the most important features of the Hungarian data set, they describe the start-up intentions, the university and college environment and compare them to the international data.

Three essays on entrepreneurial entry, serial entrepreneurship, and labor turnover

This study explores two important aspects of entrepreneurship — liquidity constraints and serial entrepreneurs, with an additional analysis of occupational choice among wage workers. In the first essay, I revisit the question of whether entrepreneurs face liquidity constraints in business formation. The principle challenge is that wealth is correlated with unobserved ability, and adequate instruments are often difficult to identify. This paper uses the son's birth order as an instrument for household wealth. I exploit the data available in the Korean Labor and Income Panel Study, and find evidence of liquidity constraints associated with self-employment in South Korea. The second essay develops and tests a model that explains entry into serial entrepreneurship and the performance of serial entrepreneurs as the result of selection on innate ability. The model supposes that agents establish businesses with imperfect information about their entrepreneurial ability and the profitability of business ideas. Agents continually observe signals with which they update their beliefs, and this process eventually determines their next business choice. Selection on ability induces a positive correlation between entrepreneurial experience (measured by previous business earnings and founding experience) and serial business formation, as well as its subsequent performance. The predictions in the model are tested using panel data from the NLSY79. The analysis permits a distinction to be made between selection on innate ability and learning by doing. Motivated by previous empirical findings that white-collar workers had higher turnover rates than blue-collar workers during firm expansion, the third essay further examines job turnover among workers with or without specific skills. I present a search-matching model, which predicts that when firm growth is driven by technological advance, workers whose skills are specific to the obsolete technology show a higher tendency to separate from their jobs. This hypothesis is tested with data from the PSID. I find supportive evidence that in the context of technological change, having an occupation requiring specific skills, such as computer specialists or engineers, increases the odds of job separation by nearly eight percent. ^

An Enterprise Opportunity for Entrepreneurial Students: Student Enterprise Development and Experience Assessed through the Student Voice

Purpose: This research investigates the effectiveness of an experiential learning approach, available to students in all disciplines that combined a hands-on entrepreneurial and enterprise experience with professional consultant mentoring by using a competition to win business start-up funding. Design/methodology/approach: Students at a UK university had the chance to enter a competition in which they developed an entrepreneurial idea and then designed and presented a business plan to win business start-up capital. Students who were entrepreneurially motivated, but who lacked capital to start up their business, were targeted, as these students have been argued to benefit the most from a combination of business plan training and entrepreneurial development. Feedback and data was obtained from the students at each stage of the process and was thematically analysed to assess the development of students’ entrepreneurial skills and knowledge through the experience. Findings: The research found that the benefits gained from this approach included both enterprising and entrepreneurial skills, with the greatest impact being on student confidence and belief in their ability to start a business. The practical skills had a ‘demystifying’ effect on students that made them feel like entrepreneurship and enterprise start-up were attainable. Research limitations/implications: The research focused on students at one UK University and centered on entrepreneurship in a retail business. The competition thus appealed mainly to students who were interested in retail start-up, thus leaving out some enterprising students whose feedback may have been different. In addition, while entrepreneurial skills are assessed in the data, the students who would be interested in the competition would be assumed to be proactive, and this skill was not able to be analyzed. This research is a single case, and thus could be enhanced by more cases and looking at other enterprise start-up means beyond retail. Originality/value: This research makes a case that, in light of literature critical of the use of business plan training in entrepreneurship education, certain students are appropriate candidates for this approach. Specific skills and knowledge can be developed in university students using a live enterprise experience, supported by entrepreneurial mentoring. By making the event extracurricular, the study sought to capture the feedback of students who self-selected into the program, who can benefit most from combined entrepreneurial and business-plan development experience.

Exploring the Success of Student Experiential Learning through Entrepreneurial Opportunities

Academic literature has increasingly recognized the value of non-traditional higher education learning environments that emphasize action-orientated experiential learning for the study of entrepreneurship (Gibb, 2002; Jones & English, 2004). Many entrepreneurship educators have accordingly adopted approaches based on Kolb’s (1984) experiential learning cycle to develop a dynamic, holistic model of an experience-based learning process. Jones and Iredale (2010) suggested that entrepreneurship education requires experiential learning styles and creative problem solving to effectively engage students. Support has also been expressed for learning-by-doing activities in group or network contexts (Rasmussen and Sorheim, 2006), and for student-led approaches (Fiet, 2001). This study will build on previous works by exploring the use of experiential learning in an applied setting to develop entrepreneurial attitudes and traits in students. Based on the above literature, a British higher education institution (HEI) implemented a new, entrepreneurially-focused curriculum during the 2013/14 academic year designed to support and develop students’ entrepreneurial attitudes and intentions. The approach actively involved students in small scale entrepreneurship activities by providing scaffolded opportunities for students to design and enact their own entrepreneurial concepts. Students were provided with the necessary resources and training to run small entrepreneurial ventures in three different working environments. During the course of the year, three applied entrepreneurial opportunities were provided for students, increasing in complexity, length, and profitability as the year progressed. For the first undertaking, the class was divided into small groups, and each group was given a time slot and venue to run a pop-up shop in a busy commercial shopping centre. Each group of students was supported by lectures and dedicated class time for group work, while receiving a set of objectives and recommended resources. For the second venture, groups of students were given the opportunity to utilize an on-campus bar/club for an evening and were asked to organize and run a profitable event, acting as an outside promoter. Students were supported with lectures and seminars, and groups were given a £250 budget to develop, plan, and market their unique event. The final event was optional and required initiative on the part of the students. Students were given the opportunity to develop and put forward business plans to be judged by the HEI and the supporting organizations, which selected the winning plan. The authors of the winning business plan received a £2000 budget and a six-week lease to a commercial retail unit within a shopping centre to run their business. Students received additional academic support upon request from the instructor, and one of the supporting organizations provided a training course offering advice on creating a budget and a business plan. Data from students taking part in each of the events was collected, in order to ascertain the learning benefits of the experiential learning, along with the successes and difficulties they faced. These responses have been collected and analyzed and will be presented at the conference along with the instructor’s conclusions and recommendations for the use of such programs in higher educations.

Entrepreneurial skills of students of polytechnic higher education in Portugal: Business influences

Introduction: Most of entrepreneurial ideas does not appear ready or over. Any business opportunity needs to be developed and improved throughout the enterprise process. Educational institutions may facilitate the ability of the students had undertaken, identifying and building business opportunities, enhancing their knowledge and formative experiences along the learning process. Objectives: Evaluate the business influences the entrepreneurial ability of students of the Polytechnic. Methodology: Correlational quantitative study, conducted with 1604 students from 18 institutions of the Polytechnic of Portugal. Data collection took place between July and November/2015, with a questionnaire to assess the entrepreneurial profile, Carland Entrepreneurship Index (CEI) and sociodemographic variables of students. Results: We found four business factors that influence entrepreneurship, "availability of funds" (4:13, SD = .67); "Have stable customers and incentives" (3.99, SD = .58); "Social and economic instability" (3:08, SD = 1.17) and "opportunities in the sector and area of residence" (3:36, SD = 1.05). On a scale range between (1-5), we obtained an overall score of 3.86 (SD = .55), for the corporate influences on entrepreneurship. Conclusion: For students entrepreneurial influences are important, with a greater sense of fear with regard to economic instability, reinforcing the need for further training and academic investment in the business.

Entrepreneurial skills of students of polytechnic higher education in Portugal: Business influences

Background Most entrepreneurial ideas do not appear ready or finished. Any business opportunity needs to be developed and improved throughout the enterprise process. Educational institutions may facilitate the ability of the students in undertaking, identifying and building business opportunities, enhancing their knowledge and formative experiences along the learning process. Objective: Evaluate business influences on the entrepreneurial ability of students of the Polytechnic. Methods Correlational quantitative study, conducted with 1,604 students from 18 institutions of the Polytechnic of Portugal. Data collection took place between July and November/2015, with a questionnaire to assess the entrepreneurial profile, the Carland Entrepreneurship Index (CEI) and sociodemographic variables of students. Results We found four business factors that influence entrepreneurship: "availability of funds" (4:13, SD = .67); "Having stable customers and incentives" (3.99, SD = .58); "Social and economic instability" (3:08, SD = 1.17) and "Opportunities in the sector and area of residence" (3:36, SD = 1.05). On a scale ranging between 1 and 5, we obtained an overall score of 3.86 (SD = .55), for the corporate influences on entrepreneurship. Conclusions For students, entrepreneurial influences are important, with a greater sense of fear with regard to economic instability, reinforcing the need for further training and academic investment in business.

Marketing in SMEs: the sales process of SMEs on the food and drink industry.

There would appear to be varied approaches to the sales process practiced by SMEs in how they go about locating target customers, interfacing with prospects and new customers, presenting the benefits and features of their products and services, closing sales deals and building relationships, and an understanding of what the buyers needs are in the seller-buyer process. Recent research has revealed that while entrepreneurs and small business owners rely upon networking as an important source of sales, they lack marketing competencies, including personal selling skills and knowledge of what is involved in the sales process to close sales deals and build relationships. Small companies and start-ups with innovative products and services often find it difficult to persuade potential buyers of the merits of their offerings because, while the products and services may be excellent, they have not sufficiently well-developed selling skills necessary to persuade their target customers.

An examination of factors that influence entrepreneurial intention of high school students in Kenya

Abstract Considerable research has been carried out on entrepreneurship in efforts to understand its incidence in order to influence and maximize its benefits. Essentially, researchers and policy makers have sought to understand the link between individuals and business creation: Why some people start businesses while others do not. The research indicates that personality traits, individual background factors and association of entrepreneurship with career choice and small business enterprises, cannot sufficiently explain entrepreneurship. It is recognized that entrepreneurship is an intentional process and based on Ajzen’s Theory of Planned Behavior, the most defining characteristic of entrepreneurship is the intention to start a business. The purpose of this study was, therefore, to examine factors that influence entrepreneurial intention in high school students in Kenya. Specifically, the study aimed at determining if there were relationships between the perceptions of desirability, and feasibility of entrepreneurship with entrepreneurial intention of the students, identifying any difference in these perceptions with students of different backgrounds, and developing a model to predict entrepreneurship in the students. The study, therefore, tested how well Ajzen’s Theory of Planned Behavior applied in the Kenyan situation. A questionnaire was developed and administered to 969 final year high school students at a critical important point in their career decision making. Participants were selected using a combined convenience and random sampling technique, considering gender, rural/urban location, cost, and accessibility. Survey was the major method of data collection. Data analysis methods included descriptive statistics, correlation, ANOVA, factor analysis, effect size, and regression analysis. iii The findings of this study corroborate results from past studies. Attitudes are found to influence intention, and the attitudes to be moderated by individual background factors. Perceived personal desirability of entrepreneurship was found to have the greatest influence on entrepreneurial intention and perceived feasibility the lowest. The study findings also showed that perceived social desirability and feasibility of entrepreneurship contributed to perception of personal desirability, and that the background factors, including gender and prior experience, influenced entrepreneurial intention both directly and indirectly. In addition, based on the literature reviewed, the study finds that entrepreneurship promotion requires reduction of the high small business mortality rate and creation of both entrepreneurs and entrepreneurial opportunities (Kruger, 2000; Shane & Venkataraman, 2000). These findings have theoretical and practical implications for researchers, policy makers, teachers, and other entrepreneurship practitioners in Kenya.

Business model evolution and firm performance of entrepreneurial companies

This research explores the business model (BM) evolution process of entrepreneurial companies and investigates the relationship between BM evolution and firm performance. Recently, it has been increasingly recognised that the innovative design (and re-design) of BMs is crucial to the performance of entrepreneurial firms, as BM can be associated with superior value creation and competitive advantage. However, there has been limited theoretical and empirical evidence in relation to the micro-mechanisms behind the BM evolution process and the entrepreneurial outcomes of BM evolution. This research seeks to fill this gap by opening up the ‘black box’ of the BM evolution process, exploring the micro-patterns that facilitate the continuous shaping, changing, and renewing of BMs and examining how BM evolutions create and capture value in a dynamic manner. Drawing together the BM and strategic entrepreneurship literature, this research seeks to understand: (1) how and why companies introduce BM innovations and imitations; (2) how BM innovations and imitations interplay as patterns in the BM evolution process; and (3) how BM evolution patterns affect firm performances. This research adopts a longitudinal multiple case study design that focuses on the emerging phenomenon of BM evolution. Twelve entrepreneurial firms in the Chinese Online Group Buying (OGB) industry were selected for their continuous and intensive developments of BMs and their varying success rates in this highly competitive market. Two rounds of data collection were carried out between 2013 and 2014, which generates 31 interviews with founders/co-founders and in total 5,034 pages of data. Following a three-stage research framework, the data analysis begins by mapping the BM evolution process of the twelve companies and classifying the changes in the BMs into innovations and imitations. The second stage focuses down to the BM level, which addresses the BM evolution as a dynamic process by exploring how BM innovations and imitations unfold and interplay over time. The final stage focuses on the firm level, providing theoretical explanations as to the effects of BM evolution patterns on firm performance. This research provides new insights into the nature of BM evolution by elaborating on the missing link between BM dynamics and firm performance. The findings identify four patterns of BM evolution that have different effects on a firm’s short- and long-term performance. This research contributes to the BM literature by presenting what the BM evolution process actually looks like. Moreover, it takes a step towards the process theory of the interplay between BM innovations and imitations, which addresses the role of companies’ actions, and more importantly, reactions to the competitors. Insights are also given into how entrepreneurial companies achieve and sustain value creation and capture by successfully combining the BM evolution patterns. Finally, the findings on BM evolution contributes to the strategic entrepreneurship literature by increasing the understanding of how companies compete in a more dynamic and complex environment. It reveals that, the achievement of superior firm performance is more than a simple question of whether to innovate or imitate, but rather an integration of innovation and imitation strategies over time. This study concludes with a discussion of the findings and their implications for theory and practice.