The Impact of Social Capital on the Start-ups' Performance Growth (original) (raw)
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Social Capital in Knowledge Intensive Start-Ups
About a decade ago suggested that success for start-ups not only depends on who you are but also on whom you know. Around the mid-90s research results were published showing that essential resources for start-ups were in fact acquired through the entrepreneurs' social networks including family, friends, pre-existing work relations, and affiliation with various societies . To study these aspects of social capital in relation to entrepreneurial activities, research in a Danish start-up context in two knowledgeintensive sectors has been carried out. The research methodology was based on a triangulation approach including a general questionnaire-based survey conducted through the Internet as well as a number of in-depth interviews in purposefully sampled ventures. The results provide an analysis of the content and structure of social capital in relation to entrepreneurial activities in new technology based small firms showing that teams are primarily composed of 'trusted alters' and networking patterns are highly influenced by the entrepreneur's attitude to and perception of networking.
Effects of Social Capital on Start-up Outcomes
2019
This thesis explores the effects of social capital on start-up outcomes. Entrepreneurs' ability to access and utilise social capital, through bonding and bridging relationships of various types, facilitated by trust, is essential to the success of their startups. This study identifies and differentiates two key forms of bonding, surfacing tribal bonding as a new concept distinct from bonding as traditionally recognised. Traditional bonding depends on developing ties and trust over time, while tribal bonding is built on individuals' inherent desire to contribute towards the value of the group. Tribal bonding requires less time than traditional bonding to develop relationships, results in reduced monitoring, and facilitates faster tacit knowledge transfer; all of these factors reduce costs relative to traditional bonding. Particularly during the start-up stage, reduced cost and faster decision making are crucial for entrepreneurs, who are typically short on cash and time as their ventures have not started generating revenues or profits. Abductive reasoninga back-and-forth approach directed by theory juxtaposed with dataenabled the discovery of tribal bonding social capital, a previously unidentified form with features differing from those of bonding as traditionally conceived. Abductive reasoning further divided people who affect start-ups into two broad groups: those who affect supply and those who affect demand. The Qualitative Comparative Analysis (QCA) method, based on set theory, enabled examination of tribal bonding alongside traditional bonding, bridging, and trust. QCA identified multiple pathways to start-up outcome. The identified pathways were categorised into two major approaches, one reliant on traditional bonding and the other on tribal bonding. This study contributes to theory through the separation of tribal bonding and traditional bonding, leading to the creation of a conceptual model indicating the relative cost implications of engaging the two types of bonding as well as a framework that differentiates the impacts of groups that affect supply from groups that affect demand. The methodological accomplishments of this study include the successful combination of abduction and retroduction, incorporating QCA to examine the effects of tribal bonding on start-up outcomes. From a practical perspective, the derived model and framework may guide practitioners regarding how to optimally mix their interactions with various types of groups affecting start-ups, including (but not limited to) how to access required resources at the lowest cost.
J. Mgt. Mkt. Review , 2019
Objective-Start-up support has not received enough research attention although it is an integral element of the start-up ecosystem that provides resources and services in the form of various support to start-ups. There is a need to explore the effectiveness of various start-up support because the question as to whether such supports contribute to start-up success remains unanswered. Methodology/Technique-While human capital and social capital has been linked to entrepreneurial success, little is known about how these capitals moderate the effect of start-up access to support. Findings-This paper contributes to start-up literature by presenting a conceptual framework appropriate to investigate the effect of a start-up's access to support on start-up success as well as how this effect is accentuated by the human and social capital of start-up entrepreneurs. Novelty-Further understanding of how human capital and social capital could strengthen the contribution of support to start-up success represents an important direction for future entrepreneurship research. This paper also discusses the limitations of relevant previous research and offers suggestions for future research.
Despite a surge of studies examining the role of social capital in the entrepreneurial process, no quantitative assessments exist of the empirical evidence to date. To resolve seemingly conflicting results, we conducted a meta-analysis of the link between entrepreneurs' personal networks and small firm performance and identify new moderators affecting this relationship. Analyses of 61 independent samples indicated that the social capital-performance link was positive and significant (r c =.211). Effect sizes of weak ties were smaller than those of structural holes, while network diversity had the largest positive effect on performance. Results also showed that the social capital-performance link depends on the age of small firms, the industry and institutional contexts in which they operate, and on the specific network or performance measures used. Based on these findings, we develop recommendations for future research on the contingent value of social capital for small firms.
Social capital in the growth of science-and-technology-based SMEs
Industrial Marketing Management, 2008
There is increasing evidence of the positive role social capital plays in accessing resources and capabilities from and with other actors, and in establishing and maintaining business relationships. Yet, surprisingly little is known about how an organization's social capital and its utilization evolve over time. Focusing on this gap, this paper explores the role of social capital and its structural, relational and cognitive dimensions in the growth of science-and-technology-based SMEs. On the basis of our studies on social capital, entrepreneurial networks and SME growth, we develop a conceptual framework to describe their development through four overlapping phases, each of which involves different managerial tasks: innovation assessment, offering development, commercialization and rapid growth. The results of our longitudinal multiple case studies show that; (i) different types of networks and relationships are important in the transitional periods between the growth phases; and (ii) the role of social capital and its different dimensions varies in developing, maintaining and utilizing these partnerships and network relationships. These findings offer several managerial implications.
The Effect of Social Capital of Entrepreneurs in Entrepreneurial Process
2019
Abstract. when many entrepreneurial processes framework identify the role of networking as important part at the start-up development stage, this study have extended the concept of networking and embraced it in the concept of individual social capital of entrepreneurs. However, much of literature on measuring social capital has focused on the quantity of social capital rather than quality made by it. This study will focus and seek to expand the depth and richness of social capital during new venture creation and later identifying the effect of individual social capital in entrepreneurial process. to expand and specify the richness of individual social capital during venture creation, Timmons Model of Entrepreneurial process are used. It considers opportunity, team, and resources as three components for successful new business, and later associate it with Bonding and Bridging and Linking Social Capital of Entrepreneur. The research is mainly expected to provide insight for the busine...
2016
Information technology (IT) and entrepreneurship are more closely related than ever. The internet, in particular, inspires the current ‘generation start-up’. While some early stage internet start-ups have quickly become major successes, others fail to secure required follow-up funding and collapse. In this paper, we build on and extend the emerging business model research stream with the aim of better understanding the differences between successful and unsuccessful early stage internet start-ups. In the qualitative first part of our mixed-method study, 17 expert informant interviews reveal that internet start-up business models are in permanent flux, continually changed and adapted by founders, who identify their professional social network (i.e. their social capital) as a critically important factor for developing the business model and ultimately making their start-ups successful. In the quantitative second part of the study, we test this claim based on a social network analysis of 70 internet start-ups and their 145 founders. We find strong support for the critical importance of the founders’ social capital for early stage internet start-up success. The findings of this study advance our understanding of the relationship between founders’ social capital, the development of business models and the success of early stage internet start-ups.