The Development of Social Capital and Financing of Entrepreneurial Firms: From Financial Bootstrapping to Bank Funding

Jönsson, Sara; Lindbergh, Jessica

doi:10.1111/j.1540-6520.2011.00485.x

Cited by 83 publications

(81 citation statements)

References 79 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The relational dimension of social capital refers to assets generated through relationships that individuals develop through a history of interactions (Inkpen & Tsang, 2005;Jonsson & Lindbergh, 2013). The prior research recognizes the similarities between the structural and relational dimensions of social capital because both emphasize the strengthening of connections (e.g.…”

Section: Theoretical Contextmentioning

confidence: 99%

“…The prior research recognizes the similarities between the structural and relational dimensions of social capital because both emphasize the strengthening of connections (e.g. Jonsson & Lindbergh, 2013;Moran, 2005), and similarities between the cognitive and relational dimensions of social capital because they reflect attitudes toward the expectations of how others will behave (e.g. Tötterman & Sten, 2005).…”

Section: Theoretical Contextmentioning

confidence: 99%

“…Inkpen and Tsang (2005) and Jonsson and Lindbergh (2013) recognize trust as a central value of the relational dimension of social capital because it represents strong links among the network members, a mutual understanding of appropriate behavior during interactions, and each member's integrity and reliability. Moran (2005) indicates that the relational dimension establishes how much of the potential in a social network can be realized.…”

Section: Theoretical Contextmentioning

confidence: 99%

“…direct and indirect) and patterns (i.e. hierarchy and density) through which individuals relate in networks and how these relationships are arranged, which have the potential to affect the amount and diversity of resources that can be accessed by the members of a network (Inkpen & Tsang, 2005;Jonsson & Lindbergh, 2013). We argue that guanxi-wang (networks based on guanxi), guanxi-hu (specially connected individuals), jia-ren (a web of family members and close relatives), shou-ren (a web of friends, kin, or clan-based acquaintances and distant relatives), and sheng-ren (a web of relationship with distant acquaintances or strangers) are guanxirelated concepts that connect closely to the structural dimension of social capital because they also represent patterns of relationships among individuals in a network that influence access to resources.…”

Section: Theoretical Contextmentioning

confidence: 99%

See 3 more Smart Citations

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

Liu

2016

The International Journal of Human Resource Management

View full text Add to dashboard Cite

We investigate the role of guanxi in Chinese entrepreneurial firms' recruitment practices in attempting to overcome the liability of smallness. Combining insights from the social capital and guanxi literature, we theorize the guanxi-based social capital perspective and use it to analysis 96 in-depth interviews with multiple members (entrepreneurs, senior managers, and factory workers) from 15 die-casting entrepreneurial firms in Guangdong province, China. We find that the use of guanxi in recruitment practice can overcome the liability of smallness because it makes the hiring process more convenient, improves firms' attractiveness to jobseekers, and enhances the person-organizational fit between new hires and firms. We discuss how Chinese entrepreneurs and their senior managers use guanxi strategically to achieve these advantages. On the other hand, our findings suggest that jobseekers can also use guanxi to increase their options, improve their bargaining power, and distract firms' attention away from hiring the most appropriate candidate for the job in order to undermine the effectiveness of Chinese entrepreneurial firms' recruitment procedures. We explore the implications of these findings for academic research and managerial practice.

show abstract

Section: Theoretical Contextmentioning

confidence: 99%

Section: Theoretical Contextmentioning

confidence: 99%

Section: Theoretical Contextmentioning

confidence: 99%

Section: Theoretical Contextmentioning

confidence: 99%

See 2 more Smart Citations

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

Liu

2016

The International Journal of Human Resource Management

View full text Add to dashboard Cite

show abstract

“…Firm owners bootstrap critical resources through a variety of methods, including business alliances (Freear, Sohl, and Wetzel 1995;Hung 2006), personal sources (Ebben and Johnson 2006), and social networks (Baker, Miner, and Eesley 2003;Heuven and Groen 2012;Jonsson and Lindbergh 2013). The latter are particularly important for resourcing new ventures (Jones and Jayawarna 2010), although past entrepreneurial experience does not have a significant impact (Grichnik et al 2014).…”

Section: Resourcing High-technology Start-upsmentioning

confidence: 99%

Seeding the cloud: financial bootstrapping in the computer software sector

Bhaird

Lynn

2015

Venture Capital

View full text Add to dashboard Cite

Seeding the cloud: Financial bootstrapping in the computer software sector.This study investigates resourcing of computer software companies that have adopted cloud computing for the development and delivery of application software. Use of this innovative technology potentially impacts firm financing because the initial infrastructure investment requirement is much lower than for packaged software, lead time to market is shorter, and cloud computing supports instant scalability. We test these predictions by conducting in-depth interviews with founders of 18 independently owned nascent enterprises, of which three quarters have adopted cloud computing. We identify particular bootstrapping methods used by start-ups in the computer software sector. Cloud computing enables firms to develop and launch products with minimal resources, reducing barriers to entry, with consequent increased competition. The primary business bootstrapping technique is foregoing wages, supplemented by small amounts of grant funding. Customers are a source of knowledge and expertise for product development, which occurs in an iterative process. Product bootstrapping techniques have changed in response to technological innovation, although methods to acquire tangible assets are identical over time. Astutely applied, financial bootstrapping is a resource management strategy essential to the growth and survival of high technology firms.Keywords: software industry; bootstrapping; cloud computing; social networks; private equity; business angels; disruptive innovation IntroductionHigh technology based firms are an important source of employment creation, economic growth and technological innovation (Colombo et al. 2010;Freear, Sohl, and Wetzel 2002;North, Baldock, and Ullah 2013;Rasmussen and Sørheim 2012). Central to the development of a high technology small firm sector is a considerable level of start-up activity and new firm formation. A barrier to this expansion, however, is the ability of firm founders to acquire adequate finance for their nascent ventures (Basu and Parker 2001;North, Baldock, and Ekanem 2010). This is particularly evident for introduction of technological innovation for new firms in the computer software sector.We contextualise our findings in relation to the literature by comparing bootstrapping techniques used by firms in our sample with those used by computer software firms studied by Wetzel (1995), andGirling (2004).We address the dearth in the literature identified by Grichnik et al. (2014) Resourcing implications for software firms adopting cloud computingCloud computing refers to applications delivered as services over the internet, and the hardware and systems software in datacentres that provide those services (Armbrust et al. 2009). Thus, cloud computing may be conceptualised as a combination of three layers of abstraction: software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS) (Weinhardt et al, 2009, Vaquero et al, 2008. The first layer is the focus of our study, and ...

show abstract

Sustainable Entrepreneurship: A Convergent Process Model

2015

View full text Add to dashboard Cite

Sustainable entrepreneurship pursues a triple bottom line approach of economic, social and ecological goals. The main aim of this paper is to add to our understanding of the process of sustainable entrepreneurship. Since the field of sustainable entrepreneurship is in a nascent stage, we conduct a qualitative study. We employ a multiple case study design to build theory. Based on four case studies we develop a model, which describes the process of sustainable entrepreneurship, including six phases: 1) recognizing a social or ecological problem; 2) recognizing a social or ecological opportunity; 3) developing a double bottom line solution; 4) developing a triple bottom line solution; 5) funding and forming of a sustainable enterprise; 6) creating or entering a sustainable market. By developing a convergent process model with two pathways, we make theoretical contributions to the emerging fields of sustainable entrepreneurship and social entrepreneurship. A key finding is that the triple bottom line of ecological, social and economic goals is integrated sequentially, not simultaneously. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment.

show abstract

The Development of Social Capital and Financing of Entrepreneurial Firms: From Financial Bootstrapping to Bank Funding

Cited by 83 publications

References 79 publications

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

Overcoming the liability of smallness by recruiting through networks in China: a guanxi-based social capital perspective

Seeding the cloud: financial bootstrapping in the computer software sector

Sustainable Entrepreneurship: A Convergent Process Model

Contact Info

Product

Resources

About