Entrepreneurial Judgment and Value Capture, the Case of the Nascent Offshore Renewable Industry

Abstract

Entrepreneurship may be regarded as the mechanism of change towards sustainability. Any entrepreneur that seeks to start a new venture in an emerging industry will face resource and time constraints. The question we raise here is how the entrepreneur should prioritize use of time and resources to increase likeliness of success. To address this question we depart from a theoretical perspective of entrepreneurship seen as judgment, and bridges it over to entrepreneurship seen as co-creation. In other words, we combine the subjective with the intersubjective, and explore the effects of the actions successful green technology entrepreneurs in the emerging offshore renewable energy industry make in building their new ventures in nascent markets. Inspired by earlier studies on market entry, combined with new ways to understand new venture emergence, we find that independent entrepreneurs benefit from leapfrogging typical stages in the technology development process and rather devote time and efforts on resource acquisition. We also find that the most important value-capturing, decision-making heuristics are those related to "hybrid governance". We discuss implications for theory, practice, and policy.

Reveal or Conceal? Signaling Strategies for Building Legitimacy in Cleantech Firms

“…Sustainability signals were instead used more intensively and more intentionally as the firm evolved. These findings are in line with Ge et al [6] and Erikson et al [15] indicating that cleantech firms tend to act somewhat slowly upon their environmental sustainability realizing that this type of signal may provide an additional source of legitimacy. New firms in cleantech industry do not become automatically legitimate despite an institutional pressure that exists to generate solutions that quickly address the sustainability challenges [15].…”

“…These findings are in line with Ge et al [6] and Erikson et al [15] indicating that cleantech firms tend to act somewhat slowly upon their environmental sustainability realizing that this type of signal may provide an additional source of legitimacy. New firms in cleantech industry do not become automatically legitimate despite an institutional pressure that exists to generate solutions that quickly address the sustainability challenges [15]. Interestingly, the constitution of and changes to the board of directors appears to be one of the most important mechanisms for generating legitimacy signaling across all development phases of a new firm.…”

“…Future researchers are therefore encouraged to investigate whether and how signaling strategies pursued by cleantech firms would be similar or different across multiple institutional contexts. In addition, more research is needed that compares cleantech firms with other technology firms, among all due to that they perceive various obstacles differently throughout firm's development [15,22].…”

“…Hence, an entrepreneur may have to undertake harder efforts in changing existing institutional environment by changing both formal and informal rules that define what is legitimate, in order to access those resources [13,14]. Actions that contribute to the building of legitimacy therefore become a priority, otherwise there is a high risk to fail before completing the technology development [15].…”

Are Distances Barriers to Sustainability for Venture Capital Syndication?

“…New startups assume the principal responsibility for industrial innovation and changes [1]. However, entrepreneurs often face financing obstacles and resource scarcity, hindering their survival and growth [2][3][4][5]. Venture capital (VC) firms by their nature invest in entrepreneurial businesses with high growth and profit return prospects.…”