Collewaert, Veroniek; Anseel, Frederik; Crommelinck, M.; De Beuckelaere, A.; Vermeire, Jacob (2016)
This study examines how and why entrepreneurial passion for founding changes over time. In particular, we propose that in the founding phase of a venture's lifecycle entrepreneurs' founding identity centrality will remain stable over time. We also propose, however, that in our sample and time period studied, entrepreneurs' intense positive feelings for founding will decrease over time. On the basis of theories of positive illusion, self-regulation and role theory, we further hypothesize that venture idea change, change in role ambiguity and entrepreneurs' feedback-seeking behaviour are factors that help explain the rate of change in entrepreneurs' intense positive feelings for founding. Using a three-wave longitudinal research design, we find that among a sample of 112 entrepreneurs' identity centrality does not change over time, whereas intense positive feelings for founding decrease over time. Moreover, the more entrepreneurs change their venture ideas, the weaker their decrease in intense positive feelings. Further, we show that entrepreneurs who frequently seek feedback suffer less from reduced positive feelings in response to higher increases in role ambiguity as compared to entrepreneurs who seek less feedback.
This paper examines how angel investors' human capital affects the valuation of their portfolio companies, based on the pre-money valuation of 123 investment rounds in 58 Belgian companies. We argue that angel investors with higher levels of human capital will perceive a higher value-creating potential in entrepreneurial opportunities through their ability to see more value-creating options, a higher value-adding potential post-investment and an enhanced legitimacy provided to the venture. Economic theories suggest they appropriate these rents through lower valuations, while stewardship theory suggests they share value creation with entrepreneurs. Consistent with stewardship theory, we show angel investors negotiate higher valuations when they have higher levels of human capital, more specifically if they studied longer, have a business degree, more entrepreneurial experience or previous professional law experience. As such, our results contrast with the behaviour of venture capital investors who negotiate lower valuations when they have more experience.
Appelhoff, Daniel; Mauer, René; Collewaert, Veroniek; Brettel, M. (2016)
While prior research has indicated the importance of conflicts between investors and entrepreneurs, little is known about their causes. We use theory on entrepreneurial decision-making to examine the impact of a founding team's causal versus effectual decision style on the level of perceived task conflict that founders experience with their venture capitalists. Based on a sample of 141 German ventures, we find that a founding team perceives fewer conflicts when following the causal principle of overcoming the unexpected and the effectual principle of affordable loss.
This study examines how angel investor–entrepreneur task conflicts are related to portfolio company innovativeness and how this relationship is moderated by the level of agreement on priorities, diversity of entrepreneurial experience, and the level of communication. Using survey data gathered from 54 teams of angels and entrepreneurs in Belgium and the United States, we show that the negative relationship between task conflict and innovativeness is more severe when the teams have lower levels of agreement on priorities, when there is less diversity of experience in the team, and when the teams communicate more frequently.
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