Pub Date : 2025-05-16DOI: 10.1016/j.jbusvent.2025.106506
Christian E. Hampel , Elena Dalpiaz
Hyped ventures attract valuable resources by framing their goals in line with the hype. However, in doing so they risk adopting problematic conduct that undermines their moral legitimacy and requires repair. To explore the overlooked internal dynamics of this phenomenon, we conduct a longitudinal case study of a hyped fintech venture that lost and repaired its legitimacy. Our paper uncovers that how hyped ventures frame the moral boundaries of the pursuit of growth influences their conduct and, in turn, facilitates the loss or repair of their legitimacy. Two dynamics underline this process: the activation of intense emotions among employees and the entrenchment of distinct organizational cultures. Importantly, our study reveals that when ventures are hyped, a “growth at all costs” frame risks kindling “antagonistic excitement” among employees and facilitating a “hubristic culture” that supports morally reckless practices. By shedding light on these dynamics within hyped ventures, our study contributes to scholarship on entrepreneurial framing, cultural entrepreneurship, and tech venture legitimacy.
{"title":"When hype collides with morality: How entrepreneurial framing affects the behavior and legitimacy of hyped ventures","authors":"Christian E. Hampel , Elena Dalpiaz","doi":"10.1016/j.jbusvent.2025.106506","DOIUrl":"10.1016/j.jbusvent.2025.106506","url":null,"abstract":"<div><div>Hyped ventures attract valuable resources by framing their goals in line with the hype. However, in doing so they risk adopting problematic conduct that undermines their moral legitimacy and requires repair. To explore the overlooked internal dynamics of this phenomenon, we conduct a longitudinal case study of a hyped fintech venture that lost and repaired its legitimacy. Our paper uncovers that how hyped ventures frame the moral boundaries of the pursuit of growth influences their conduct and, in turn, facilitates the loss or repair of their legitimacy. Two dynamics underline this process: the activation of intense emotions among employees and the entrenchment of distinct organizational cultures. Importantly, our study reveals that when ventures are hyped, a “growth at all costs” frame risks kindling “antagonistic excitement” among employees and facilitating a “hubristic culture” that supports morally reckless practices. By shedding light on these dynamics within hyped ventures, our study contributes to scholarship on entrepreneurial framing, cultural entrepreneurship, and tech venture legitimacy.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106506"},"PeriodicalIF":7.7,"publicationDate":"2025-05-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"144069428","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-30DOI: 10.1016/j.jbusvent.2025.106502
Rui Agostinho , Rui Baptista , Jolanda Hessels , Hugo Castro-Silva , Peter van der Zwan
<div><div>The present paper argues and tests the proposition that firms with older top and middle managers produce fewer entrepreneurs, because these firms offer less chances to their employees to enter managerial positions that provide valuable experience for entrepreneurship (rank effect theory). Empirical work using linked employer-employee microdata for Portugal support this. The rank effect is stronger in firms with older top managers. Employees who progress slower into managerial ranks are not pushed into entrepreneurship but are more likely to take on jobs as employees in other firms. Overall, our results suggest that firms with younger management ranks offer more chances for workers to enter managerial positions and, therefore, spawn more entrepreneurs.</div></div><div><h3>Executive summary</h3><div>A common career pathway leading towards entrepreneurship materializes through gaining experience working as a wage employee. In particular, work in top and middle management roles involving leadership and responsibility for strategic decisions should provide experience, knowledge and networks that are valuable for entrepreneurship. Founders of prominent unicorns and start-up ventures throughout the world have acquired significant managerial experience.</div><div>Top and middle management roles often involve tasks that demand a broad range of skills associated with obtaining and deploying resources, as well as organizing and managing people. Furthermore, top and middle managerial positions expose individuals to ample opportunities for obtaining new knowledge and learning, including knowledge about new business opportunities.</div><div>A recent theory named the rank effect suggests that in societies with older workforces, younger workers are less likely to become entrepreneurs because they are unable to acquire the experience and skills required for entrepreneurship. In aging societies, top and middle managers are more likely to be older and hold on to their positions for longer, thereby blocking younger subordinates from reaching managerial ranks. Since younger people are more likely to possess the energy, creativity, risk-taking and innovative abilities that enable and motivate entrepreneurs, if fewer young employees hold top and middle managerial ranks (so they can acquire essential experience), entrepreneurship rates will likely decline.</div><div>Arguably, the rank effect argument overlooks that, if workers are indeed blocked from progressing to managerial positions in firms with older workforces and managers, frustration caused by lack of career advancement may also lead them to leave, either by seeking employment in another firm, or possibly by becoming entrepreneurs themselves. If non-managerial workers frustrated with lack of career progress are more likely to become entrepreneurs, the basic argument of rank theory – that managerial experience is a vital determinant of entrepreneurial ability and motivation – is significantly weakened.<
{"title":"The entrepreneurship fountain of youth: Younger management ranks generate more entrepreneurs","authors":"Rui Agostinho , Rui Baptista , Jolanda Hessels , Hugo Castro-Silva , Peter van der Zwan","doi":"10.1016/j.jbusvent.2025.106502","DOIUrl":"10.1016/j.jbusvent.2025.106502","url":null,"abstract":"<div><div>The present paper argues and tests the proposition that firms with older top and middle managers produce fewer entrepreneurs, because these firms offer less chances to their employees to enter managerial positions that provide valuable experience for entrepreneurship (rank effect theory). Empirical work using linked employer-employee microdata for Portugal support this. The rank effect is stronger in firms with older top managers. Employees who progress slower into managerial ranks are not pushed into entrepreneurship but are more likely to take on jobs as employees in other firms. Overall, our results suggest that firms with younger management ranks offer more chances for workers to enter managerial positions and, therefore, spawn more entrepreneurs.</div></div><div><h3>Executive summary</h3><div>A common career pathway leading towards entrepreneurship materializes through gaining experience working as a wage employee. In particular, work in top and middle management roles involving leadership and responsibility for strategic decisions should provide experience, knowledge and networks that are valuable for entrepreneurship. Founders of prominent unicorns and start-up ventures throughout the world have acquired significant managerial experience.</div><div>Top and middle management roles often involve tasks that demand a broad range of skills associated with obtaining and deploying resources, as well as organizing and managing people. Furthermore, top and middle managerial positions expose individuals to ample opportunities for obtaining new knowledge and learning, including knowledge about new business opportunities.</div><div>A recent theory named the rank effect suggests that in societies with older workforces, younger workers are less likely to become entrepreneurs because they are unable to acquire the experience and skills required for entrepreneurship. In aging societies, top and middle managers are more likely to be older and hold on to their positions for longer, thereby blocking younger subordinates from reaching managerial ranks. Since younger people are more likely to possess the energy, creativity, risk-taking and innovative abilities that enable and motivate entrepreneurs, if fewer young employees hold top and middle managerial ranks (so they can acquire essential experience), entrepreneurship rates will likely decline.</div><div>Arguably, the rank effect argument overlooks that, if workers are indeed blocked from progressing to managerial positions in firms with older workforces and managers, frustration caused by lack of career advancement may also lead them to leave, either by seeking employment in another firm, or possibly by becoming entrepreneurs themselves. If non-managerial workers frustrated with lack of career progress are more likely to become entrepreneurs, the basic argument of rank theory – that managerial experience is a vital determinant of entrepreneurial ability and motivation – is significantly weakened.<","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106502"},"PeriodicalIF":7.7,"publicationDate":"2025-04-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143886445","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-26DOI: 10.1016/j.jbusvent.2025.106505
April J. Spivack , Tom Lahti , Thommie Burström , Joakim Wincent
Drawing on a qualitative case study of hype around an entrepreneurial venture, we develop a three-phase process model detailing how firm-level hype influences volatility in perceived legitimacy. We detail how hype over a new venture's practices, including coupling and decoupling, may boost legitimacy in the short term, but may also lead to long-term risks of accelerated legitimacy loss. Positively, hype amplifies excitement over new business models that may use decoupling to solve existing problems in new ways, thereby rapidly inflating perceived legitimacy. Negatively, hype triggers moral questioning, whistleblowing, and moral panicking over decoupled practices that contradict core institutional logics, thereby accelerating perceived legitimacy loss. We highlight the dynamism and intensity of hype's influence on perceived legitimacy and question the viability of decoupling as a long-term strategy for new ventures in contexts of institutional pluralism.
{"title":"Legitimacy perceptions amid institutional pluralism: How hype over decoupled practices influences entrepreneurial ventures","authors":"April J. Spivack , Tom Lahti , Thommie Burström , Joakim Wincent","doi":"10.1016/j.jbusvent.2025.106505","DOIUrl":"10.1016/j.jbusvent.2025.106505","url":null,"abstract":"<div><div>Drawing on a qualitative case study of hype around an entrepreneurial venture, we develop a three-phase process model detailing how firm-level hype influences volatility in perceived legitimacy. We detail how hype over a new venture's practices, including coupling and decoupling, may boost legitimacy in the short term, but may also lead to long-term risks of accelerated legitimacy loss. Positively, hype amplifies excitement over new business models that may use decoupling to solve existing problems in new ways, thereby rapidly inflating perceived legitimacy. Negatively, hype triggers moral questioning, whistleblowing, and moral panicking over decoupled practices that contradict core institutional logics, thereby accelerating perceived legitimacy loss. We highlight the dynamism and intensity of hype's influence on perceived legitimacy and question the viability of decoupling as a long-term strategy for new ventures in contexts of institutional pluralism.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106505"},"PeriodicalIF":7.7,"publicationDate":"2025-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143874370","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Entrepreneurship research is increasingly examining how social class origin shapes entrepreneurial pathways. This growing body of work highlights the enduring advantages and disadvantages entrepreneurs face based on their access to economic, social, and cultural capital acquired through childhood or birth—challenging the popular “rags to riches” narrative that upward mobility is equally attainable for all. To unify and extend this conversation, we develop an integrative framework that explains how entrepreneurs' social class origin influences their mobility. Drawing on an interdisciplinary review of 219 articles, we identify three class-based mechanisms—entrepreneurial finance and skills transfer, entrepreneurial habitus formation, and access to networks and evaluations—through which social class origin shapes entrepreneurial outcomes and, ultimately, social mobility. We conclude by offering three recommendations for future research on social class origin in entrepreneurship, aimed at advancing theory, addressing inequality, and informing inclusive entrepreneurial policy.
{"title":"Social class origin and entrepreneurship: An integrative review and research agenda","authors":"Leif Brändle , Anna-Lena Rönnert , Kristie J.N. Moergen , Eric Yanfei Zhao","doi":"10.1016/j.jbusvent.2025.106503","DOIUrl":"10.1016/j.jbusvent.2025.106503","url":null,"abstract":"<div><div>Entrepreneurship research is increasingly examining how social class origin shapes entrepreneurial pathways. This growing body of work highlights the enduring advantages and disadvantages entrepreneurs face based on their access to economic, social, and cultural capital acquired through childhood or birth—challenging the popular “rags to riches” narrative that upward mobility is equally attainable for all. To unify and extend this conversation, we develop an integrative framework that explains how entrepreneurs' social class origin influences their mobility. Drawing on an interdisciplinary review of 219 articles, we identify three class-based mechanisms—entrepreneurial finance and skills transfer, entrepreneurial habitus formation, and access to networks and evaluations—through which social class origin shapes entrepreneurial outcomes and, ultimately, social mobility. We conclude by offering three recommendations for future research on social class origin in entrepreneurship, aimed at advancing theory, addressing inequality, and informing inclusive entrepreneurial policy.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106503"},"PeriodicalIF":7.7,"publicationDate":"2025-04-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143864713","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-18DOI: 10.1016/j.jbusvent.2025.106500
Hongyu Shan
This study presents a novel measure of the overlap between a Corporate Venture Capital (CVC) investor and an entrepreneurial firm in the product, market, and technology spaces. Using this measure, we present an alternative parallel framework to understand an incumbent's decision to invest in or acquire a startup, grounded in the boundaries of the firm theory. The CVC's distinct features regarding property rights and incomplete contracting are preferred when the overlap is low. Also, CVC investments spur the greatest ex-post change in firm scope when the startup has moderate (vs. low or high) overlap with the corporate investor.
{"title":"Corporate venture capital and the boundaries of the firm1","authors":"Hongyu Shan","doi":"10.1016/j.jbusvent.2025.106500","DOIUrl":"10.1016/j.jbusvent.2025.106500","url":null,"abstract":"<div><div>This study presents a novel measure of the overlap between a Corporate Venture Capital (CVC) investor and an entrepreneurial firm in the product, market, and technology spaces. Using this measure, we present an alternative parallel framework to understand an incumbent's decision to invest in or acquire a startup, grounded in the boundaries of the firm theory. The CVC's distinct features regarding property rights and incomplete contracting are preferred when the overlap is low. Also, CVC investments spur the greatest ex-post change in firm scope when the startup has moderate (vs. low or high) overlap with the corporate investor.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106500"},"PeriodicalIF":7.7,"publicationDate":"2025-04-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143843112","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Immigrant entrepreneurship is a crucial topic of interest for academics, policymakers, and the popular press. Discussions of related topics often use intersectionality to explain the compounding effects of multiple “oppressed” identities; the current study provides some novel insights into how intersectional effects can also confer unique advantages to immigrant populations in the United States. We examine intersectional effects across immigrants' higher education, their home country's entrepreneurial culture, and the host country's state-level institutional environment on the probability that people become entrepreneurs. With a sample constructed from multiple sources and spanning 2005 to 2019, this research explores the channels that affect immigrants' self-selection into entrepreneurship. Although higher education and entrepreneurial cultural background positively affect new venture creation, state-level institutional barriers, like E-Verify mandates, create heterogeneous effects across immigrant groups. Furthermore, the entrepreneurial culture of immigrants' home countries leaves a lasting impression on venture creation, particularly when combined with higher education and even in the face of institutional barriers. This study offers policy makers relevant insights for how to augment the contributions of immigrant entrepreneurs and enhance the positive spillovers of new venture creation.
{"title":"Immigrant entrepreneurship in the United States: Intersectionality as a blessing and a curse","authors":"Punit Arora , Priya Nagaraj , Marta Bengoa , Debmalya Mukherjee","doi":"10.1016/j.jbusvent.2025.106501","DOIUrl":"10.1016/j.jbusvent.2025.106501","url":null,"abstract":"<div><div>Immigrant entrepreneurship is a crucial topic of interest for academics, policymakers, and the popular press. Discussions of related topics often use intersectionality to explain the compounding effects of multiple “oppressed” identities; the current study provides some novel insights into how intersectional effects can also confer unique advantages to immigrant populations in the United States. We examine intersectional effects across immigrants' higher education, their home country's entrepreneurial culture, and the host country's state-level institutional environment on the probability that people become entrepreneurs. With a sample constructed from multiple sources and spanning 2005 to 2019, this research explores the channels that affect immigrants' self-selection into entrepreneurship. Although higher education and entrepreneurial cultural background positively affect new venture creation, state-level institutional barriers, like <em>E</em>-Verify mandates, create heterogeneous effects across immigrant groups. Furthermore, the entrepreneurial culture of immigrants' home countries leaves a lasting impression on venture creation, particularly when combined with higher education and even in the face of institutional barriers. This study offers policy makers relevant insights for how to augment the contributions of immigrant entrepreneurs and enhance the positive spillovers of new venture creation.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106501"},"PeriodicalIF":7.7,"publicationDate":"2025-04-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143829029","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-04DOI: 10.1016/j.jbusvent.2025.106499
Judy Rady , David Townsend , Rick Hunt , Joseph Simpson
Technology startups confront a critical dilemma when attempting to use hype to mobilize resources under conditions of extreme uncertainty. While some scholars argue that high levels of hype play a key role in securing resources to fund startup growth, others caution that the excessive use of hype risks triggering investor skepticism, thereby undermining the extent to which investors judge a startup's claims to be plausible. To assess the validity of these competing conceptions, we analyze 302 artificial intelligence startups across 880 financing rounds using a combination of established econometric methods and emerging machine learning techniques. Our findings reveal the presence of an inverted U-shaped relationship between hype and resource mobilization, wherein investor valuations increase with hype up to a critical threshold, beyond which further hype diminishes valuation outcomes. Moreover, our analysis shows that factors enhancing the comprehensibility and credibility of hype partially offset its diminishing returns, flipping high levels of hype from a liability into an asset that improves startup valuations. Our novel theorization reconciles the performative and pejorative views of hype by demonstrating that hype's impact is contingent upon both its magnitude and the factors influencing investor plausibility judgments. In addition to materially enhancing the methodological toolbox used to assess startup rhetoric under uncertainty, our approach also provides important insights for entrepreneurship research attendant to the strategic management of visionary claims, especially when start-ups attempt to balance investor enthusiasm with realistic expectations in emergent technology sectors.
{"title":"The expectations game: The contingent value of hype as a rhetorical strategy in resource mobilization processes among AI startups","authors":"Judy Rady , David Townsend , Rick Hunt , Joseph Simpson","doi":"10.1016/j.jbusvent.2025.106499","DOIUrl":"10.1016/j.jbusvent.2025.106499","url":null,"abstract":"<div><div>Technology startups confront a critical dilemma when attempting to use hype to mobilize resources under conditions of extreme uncertainty. While some scholars argue that high levels of hype play a key role in securing resources to fund startup growth, others caution that the excessive use of hype risks triggering investor skepticism, thereby undermining the extent to which investors judge a startup's claims to be plausible. To assess the validity of these competing conceptions, we analyze 302 artificial intelligence startups across 880 financing rounds using a combination of established econometric methods and emerging machine learning techniques. Our findings reveal the presence of an inverted U-shaped relationship between hype and resource mobilization, wherein investor valuations increase with hype up to a critical threshold, beyond which further hype diminishes valuation outcomes. Moreover, our analysis shows that factors enhancing the comprehensibility and credibility of hype partially offset its diminishing returns, flipping high levels of hype from a liability into an asset that improves startup valuations. Our novel theorization reconciles the performative and pejorative views of hype by demonstrating that hype's impact is contingent upon both its magnitude and the factors influencing investor plausibility judgments. In addition to materially enhancing the methodological toolbox used to assess startup rhetoric under uncertainty, our approach also provides important insights for entrepreneurship research attendant to the strategic management of visionary claims, especially when start-ups attempt to balance investor enthusiasm with realistic expectations in emergent technology sectors.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106499"},"PeriodicalIF":7.7,"publicationDate":"2025-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143768191","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-03DOI: 10.1016/j.jbusvent.2025.106494
Xiaolong Shui , Julia Korosteleva , Bach Nguyen
This paper examines the effect of small- and medium-sized enterprises' (SMEs') pursuit of Go Green attitudes, characterized by the inclusion of environmental objectives in their strategic planning, on their entrepreneurial growth aspirations (EGAs) through the theory of planned behavior. We theorize that embracing Go Green attitudes can lead to heightened growth intentions; however, the positive relationship between Go Green attitudes and EGAs is weakened in institutional contexts that have more pronounced green subjective norms. Furthermore, the relationship between Go Green attitudes and EGAs is positively mediated by firm innovation, which serves as a behavioral control for SMEs' aspirations to grow their businesses. The empirical results we obtained from investigating a large sample of 16,074 SMEs in 39 economies are consistent with our theorization, and robust against various checks.
{"title":"From green to growth: The effect of Go Green on entrepreneurial growth aspirations","authors":"Xiaolong Shui , Julia Korosteleva , Bach Nguyen","doi":"10.1016/j.jbusvent.2025.106494","DOIUrl":"10.1016/j.jbusvent.2025.106494","url":null,"abstract":"<div><div>This paper examines the effect of small- and medium-sized enterprises' (SMEs') pursuit of <em>Go Green</em> attitudes, characterized by the inclusion of environmental objectives in their strategic planning, on their entrepreneurial growth aspirations (EGAs) through the theory of planned behavior. We theorize that embracing <em>Go Green</em> attitudes can lead to heightened growth intentions; however, the positive relationship between <em>Go Green</em> attitudes and EGAs is weakened in institutional contexts that have more pronounced green subjective norms. Furthermore, the relationship between <em>Go Green</em> attitudes and EGAs is positively mediated by firm innovation, which serves as a behavioral control for SMEs' aspirations to grow their businesses. The empirical results we obtained from investigating a large sample of 16,074 SMEs in 39 economies are consistent with our theorization, and robust against various checks.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106494"},"PeriodicalIF":7.7,"publicationDate":"2025-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143760110","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-04-01DOI: 10.1016/j.jbusvent.2025.106498
Matthew J. Lindquist , Theodor Vladasel
Entrepreneurship is often hailed as a path to upward intergenerational mobility, but few studies have explicitly tested this belief. Drawing on insights from the literature on entrepreneurial heterogeneity and returns, we compare the extent and direction of mobility across generations among Swedish entrepreneurs and employees. We study intergenerational income rank mobility using high-quality lifetime income measures for 215,000 father-son pairs. Entrepreneurs are drawn disproportionately from both poorer and richer families, but the patterns we uncover hold across the entire paternal income distribution. Sons who own incorporated businesses are more upwardly mobile across generations than employees; sons who own unincorporated businesses are more downwardly mobile. Selection on (un)observable traits fully explains incorporated sons’ moves up, but only a small share of unincorporated sons’ moves down. Income underreporting and, crucially, lower returns to human capital explain the remaining downward mobility. Unincorporated ventures appear to use entrepreneurs’ human capital inefficiently.
{"title":"Are entrepreneurs more upwardly mobile?","authors":"Matthew J. Lindquist , Theodor Vladasel","doi":"10.1016/j.jbusvent.2025.106498","DOIUrl":"10.1016/j.jbusvent.2025.106498","url":null,"abstract":"<div><div>Entrepreneurship is often hailed as a path to upward intergenerational mobility, but few studies have explicitly tested this belief. Drawing on insights from the literature on entrepreneurial heterogeneity and returns, we compare the extent and direction of mobility across generations among Swedish entrepreneurs and employees. We study intergenerational income rank mobility using high-quality lifetime income measures for 215,000 father-son pairs. Entrepreneurs are drawn disproportionately from both poorer and richer families, but the patterns we uncover hold across the entire paternal income distribution. Sons who own incorporated businesses are more upwardly mobile across generations than employees; sons who own unincorporated businesses are more downwardly mobile. Selection on (un)observable traits fully explains incorporated sons’ moves up, but only a small share of unincorporated sons’ moves down. Income underreporting and, crucially, lower returns to human capital explain the remaining downward mobility. Unincorporated ventures appear to use entrepreneurs’ human capital inefficiently.</div></div>","PeriodicalId":51348,"journal":{"name":"Journal of Business Venturing","volume":"40 4","pages":"Article 106498"},"PeriodicalIF":7.7,"publicationDate":"2025-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"143747227","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-03-26DOI: 10.1016/j.jbusvent.2025.106483
Yajing Li , Sam Garg
<div><div>We develop a novel power-centric model that examines antecedents and boundary conditions for independent directors in venture boards. Using 989 U.S. biotech and pharmaceutical ventures from 2010 to 2020, we find that the structural power gap between inside directors and VC directors is negatively associated with venture board independence. We also find that VC directors' intra-group conflict through tenure variance would weaken the impact of VC directors' power over inside directors on venture board independence, while VC ownership power through investment would strengthen it. These results offer a deeper theoretical understanding of venture boards.</div></div><div><h3>Executive summary</h3><div>The role of independent directors on venture boards—privately owned, professionally funded firms—remains underexplored in academic literature. While independent directors in public firms are primarily tasked with monitoring executives and protecting shareholders, their role in ventures is less defined. In VC-backed ventures, CEOs are often aligned with the firm's goals, and major shareholders have direct representation on the board through venture capitalist (VC) directors. The traditional agency problem, which necessitates independent directors in public firms, is absent in this context. Yet, independent directors make up about 20 % of venture boards, prompting a key question: Why do VC-backed ventures include independent directors?</div><div>This paper develops a power-based theoretical model to explain the inclusion of independent directors on venture boards. Based on organizational power theory, board seats represent structural power, with inside directors (e.g., the CEO and key executives) and VC directors as the dominant groups. These groups often have divergent priorities—VC directors emphasize short-term financial returns, while inside directors focus on long-term growth and innovation. When power is imbalanced, the dominant group resists the addition of independent directors. However, when the power gap between the two groups is smaller, conflict and stalemates become more likely, creating a need for independent directors to mediate and restore board functionality.</div><div>The paper also identifies two critical contingencies that shape this dynamic. The first is the intra-group power dynamics among VC directors. High tenure variance within the VC group reduces cohesion and alignment, weakening their collective power. This diminished unity increases the likelihood of independent directors being added to balance competing interests. The second contingency is the external investors' influence: Greater VC investment aligns VC directors more closely with external investors, amplifying their collective power relative to inside directors. This increased power advantage reduces the perceived need for independent directors.</div><div>The study's findings, based on an analysis of 989 U.S. biotech and pharmaceutical ventures from 2010 to 2020, p
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