A Dynamic Perspective
Edited by Alain Fayolle, Sarah L. Jack, Wadid Lamine and Didier Chabaud
Chapter 1: Entrepreneurial network composition and the venture creation process: an empirical investigation
While there is a general understanding of the important role social networks play in entrepreneurship, whether and why entrepreneurs’ social network composition systematically varies across stages of the new venture formation has not been adequately examined. The purpose of this study is to empirically examine whether and why entrepreneurs’ social network composition varies across the three stages of new venture formation. Specifically, we proposed that the number of entrepreneurs’ strong and weak ties significantly differs across the opportunity identification, organizing and stability/growth stages of new venture formation. We tested our predictions using a sample collected from 592 prospective and nascent US entrepreneurs who are involved in various new venture formation stages. The results of our analysis indicate that, while the number of strong ties remains stable over the entrepreneurial stages, there was a statistically significant difference in the number of weak ties across the three entrepreneurial stages. Specifically, our follow-up analysis reveals that the number of weak ties at the opportunity identification stage is substantially lower than that at the organizing and stability/growth stages. Overall, the findings enhance our understanding of the role social network composition plays in various stages of new venture formation. Implications and future research directions are discussed.