Governance in entrepreneurial ecosystems: venture capitalists vs. technology parks

Abstract

We argue two alternative routes that lead entrepreneurial start-ups to acquisition outcomes instead of liquidation. On one hand, acquisitions can come about through the control route with external financers such as venture capitalists (VCs). VCs take control through their board seats along with other contractual rights that can bring about changes in a start-up necessary to successfully attract a strategic acquirer. Consistent with this view, we show that VCs often replace the founding entrepreneur as CEO long before an acquisition exit. On the other hand, acquisitions can come about through advice and support provided to the start-up, such as that provided by an incubator or technology park. Based on a sample of 251 Crunchbase companies in the U.S. over the years 2007 to 2014, we present evidence that is strongly consistent with these propositions. Further, we show that the data indicate a tension between VC-backing of start-ups resident in technology parks insofar as such start-ups are slower to become, and less likely to be, acquired.

Entrepreneurial ecosystems: economic, technological, and societal impacts

“…Another explanation is the emergence of natural ecosystem in the recent public debate on sustainability and environmental protection, as something important for the planet. Thinking in terms of ‘ecosystems’ may also reflect the importance of a topic, like ‘business ecosystems’ (Moore 1993, 1997), ‘digital ecosystems’ (Sussan and Acs 2017), ‘university ecosystems’ (Hayter 2017; Wright et al 2017; Meoli et al 2017; Colombelli et al 2017) or ‘financial ecosystems’ (Cumming et al 2017; Ghio et al 2017) to name just a few of them.…”

Applying the ecosystem model in a new context? The case of business incubation in Oman

“…Moreover, incubators have been credited with enhancing innovation and entrepreneurship ecosystems, and developing successful triple helix structures (Etzkowitz & Leydesdorff, 1997) of university-industry-government interactions in settings as diverse as Brazil (Etzkowitz et al, 2005), and Cambridge, United Kingdom (Casper & Karamanos, 2003). In the literature, incubators are often grouped together with other similar initiatives to support innovation and new businesses such as science parks and accelerators (e.g., Cumming et al, 2019). We are focusing our research on business incubators.…”

Spatialities of entrepreneurial ecosystems

“…The debate is driven by a research interest to examine governance strategies and outcomes in ecosystems. Although governance is associated with scalar thinking, given its multi-layered outset, most studies focus on governance issues within EEs (Colombelli et al, 2019) and take a look at specific roles in regional settings (Cumming et al, 2017). As such, empirical papers stress the micro-level interactions of various entrepreneurial ecosystem actors (Cunningham et al, 2019) and different governing roles (Dedehayir et al, 2018).…”