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.

Developing local entrepreneurial ecosystems through integrated learning initiatives: the Lancaster case

“…Universities are well placed to provide these learning experiences due to the presence of staff with backgrounds in teaching and the ability to facilitate learning. At the regional ecosystemic level, our experiences in Lancaster confirm previous findings in the EE literature which see universities as ecosystem hubs (Malecki 2018), fostering entrepreneurship and innovation (Miller and Acs 2017), as key nodes in the Entrepreneurial Ecosystem (Bliemel et al 2019;Cumming et al 2019;Liguori et al 2019). We suggest that by taking this practical role as the learning facilitator and driver of the ecosystem, we can carve out a space in which universities can contribute positively to entrepreneurial ecosystem development and growth.…”

“…Furthermore, it is believed that the presence of local universities as a part of the ecosystem can foster entrepreneurship and innovation (Miller and Acs 2017). Indeed, universities, science parks and incubators have been identified by previous work as key nodes or hubs in the EE (Bliemel et al 2019;Cumming et al 2019;Liguori et al 2019;Miller and Acs 2017;Malecki 2018). However, Spigel (2016) highlights that the mere presence of such structures does not ensure they will be productively used.…”

Venture Boards: Past Insights, Future Directions, and Transition to Public Firm Boards

“…This approach to data collection has been used recently to collect venture board member data in the U.S. medical device industry (Garg et al, ). In a similar vein, scholars have also used data aggregated by Crunchbase to obtain board information (Cumming, Werth, & Zhang, ). Lately, CB Insights has also emerged as an important data source, especially for recent U.S. ventures.…”

Entrepreneurial ecosystems: a dynamic lifecycle model

“…The extant literature on entrepreneurial ecosystems has attempted to account for these inherent mechanisms by investigating their governance configurations (Colombelli et al, 2019;Colombo et al, 2019;Cumming et al, 2019;Cunningham et al, 2019b), their resilience (Roundy et al, 2017), and their evolutionary dynamics (Mack & Mayer, 2016;Brown & Mason, 2017;Auerswald & Dani, 2017). Despite the usefulness of existing frameworks, the current literature is lacking a clear theoretical foundation for the emergence, development, and change of entrepreneurial ecosystems over time, especially with regard to the transition from an entrepreneurial ecosystem towards a business ecosystem and vice versa.…”