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This inductive, multiple case study examines resource mobilization mechanisms, and associated performance outcomes, in eight early-stage health technology ventures operating under conditions of extreme resource scarcity. It reveals three archetypes, each characterized by different configurations of resource seeking and bricolage. Adding to extant research presenting bricolage as a mechanism to overcome resource constraints, this study finds that high performing ventures decreased bricolage behaviors in favor of increased, systematic resource seeking. We explain this shift as a result of ventures reinterpreting their resource space. This study seeks to contribute to resource mobilization theory—including performance implications of resource seeking and bricolage—and the study of entrepreneurial processes in early stages.
How to reconcile early-stage technology ventures’ high resource needs with what a resource-scarce environment offers? We studied eight medical technology ventures in Uganda. While all ventures reinterpreted their resource environment from local to global to find missing resources, how they did so had performance implications. High-performing ventures decreased bricolage—making do with what is at hand—in favor of resource seeking as they matured, while selectively deploying bricolage upon first resource endowments. In contrast, continuous reliance on bricolage resulted in performance tradeoffs. We traced these resource mobilization configurations to founders’ mindsets, becoming explicit upon a catalytic event such as an award. We encourage scholars to abandon the simplistic dichotomy of bricolage vs. resource seeking in favor of examining resource mobilization configurations over time.
The Changing Resource Needs of New Ventures and Venture Capital Syndicate Diversity
University of Texas at Dallas H. Dennis Park,
University of Texas at Dallas
We examine how the changing resource needs of a new venture affects the composition of a venture capital (VC) syndicate in terms of its expertise diversity. We first find that late-stage ventures will have a more diverse syndicate in terms of expertise. However, the extent to which lead VCs compose a syndicate with greater expertise diversity of a late-stage venture will depend on factors that affect the tradeoff between resource benefits and coordination costs in managing a highly diverse syndicate, including the expertise diversification of lead VC investor, syndicate members’ co-investment experience, and market uncertainty . Our study provides an evolutionary perspective on the resource dependence dynamics between lead VC investor and its syndicate members.
When Financial Resources Don’t Add Up to Success: The Failure of a New Charter School
Montana State University Michael Devaughn,
University of St. Thomas
The achievement gap due to differences in educational opportunities is one of the important issues facing society today that can impact workforce preparedness and exacerbate existing income inequality. Businesses and philanthropic foundations have devoted millions of dollars to supporting innovations in the education industry with varying degrees of success in both the formation and operation of new schools and in the academic outcomes of stable ones. In this paper we focus on the case of a well-resourced new charter school that failed after the first year of operation to understand if the existing entrepreneurial focus on resource accrual as a predictor of new venture performance needs to be adapted.
Early-stage Resource Acquisition Processes in a Health-care Technology Venture
Syracuse University Shi Ying Lim,
National University of Singapore
While prior research has made significant progress in understanding how new ventures acquire resources from key external resource providers, it provides few insights into the resource acquisition processes during a new venture’s earliest stages. Thus, our study explores how resourcing unfolds in nascent stages through an inductive and in-depth single case study of a health-tech startup. Using rich and fine-grained digital trace data from founders’ digital calendars tracking 1,133 meetings with resource providers, we unpack the complex and non-linear process of resource acquisition in the crucial first three years. Founders engage in an expansive and simultaneous search for multiple resources and this process ebbs and flows based on founders’ exit expectations, periods of resource scarcity, and access to less commonly studied peripheral resources.