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Article
Friends, Family, or Fools: Entrepreneur Experience and its Implications for Equity Distribution and Resource Mobilization
Journal of Business Venturing
  • Reddi KOTHA, Singapore Management University
  • Gerard GEORGE, Singapore Management University
Publication Type
Journal Article
Version
submittedVersion
Publication Date
9-2012
Abstract

Who helps entrepreneurs raise the resources they need and how much equity does an entrepreneur distribute in return? We use a sample of 611 entrepreneurs in the U.S. to examine why some entrepreneurs are more likely than others to distribute ownership selectively to helpers. We find that entrepreneurs with specific industry experience and start-up experience are able to provide ownership more selectively and raise more resources from their helpers. We refine the categorization of social ties further to make a distinction between professional and familial ties to show that the ownership distribution and types of resource contributions vary by the mix of ties in the entrepreneur's helper network. Our findings have implications for theories of resource assembly, social structure and entrepreneurship, and organization design.

Keywords
  • Equity Distribution,
  • Resources,
  • Specific Experience
Identifier
10.1016/j.jbusvent.2012.02.001
Publisher
Elsevier
Creative Commons License
Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International
Comments

Received the Best Paper Award in the family business category, Entrepreneurship Division, Academy of Management, 2006.

Additional URL
https://doi.org/10.1016/j.jbusvent.2012.02.001
Citation Information
Reddi KOTHA and Gerard GEORGE. "Friends, Family, or Fools: Entrepreneur Experience and its Implications for Equity Distribution and Resource Mobilization" Journal of Business Venturing Vol. 27 Iss. 5 (2012) p. 525 - 543 ISSN: 0883-9026
Available at: http://works.bepress.com/gerard-george/41/