The influence of resource acquisition timing on nascent venture performance
Steege, H. ter
MetadataShow full item record
Introduction The venture creation process is, after decades of studies, still a process wrought with failure. The majority of research done in this field relies on static measurements of variables that influence the performance of nascent ventures. As a result there is a lack in understanding of how the timing of resource acquisition influences the performance of ventures. This study aims to address that gap in literature and test how the timing of resource acquisition influences nascent venture creation speed and growth. Theory The focus lies on resources since those influence the performance of firms according to the Resource Based View. Ventures develop value-creating strategies based on the resources that are available to them. Two key types of resources in nascent ventures are human and capital resources. Human resources encompass the founders, employees and service providers that provide work. Capital resources consist of founder investments and acquired loans. Methodology Multiple linear regression is used to test the influence of these resources on the creation speed and growth in terms of revenue of nascent ventures in the ICT or alternative energy sector. The independent variables in this analysis are the time from venture conception to the moment when the first founder started working, the first employee was hired, the first service provider was hired, the first investment by a founder was made and when the first loan was acquired. The quantity of each resource, the sector in which the venture operates and the nature of the good it provides are included as control variables. Results The multiple linear regression analyses show that various human and capital resources influence creation speed significantly. No significant influence of any resource is found on revenue. The revenue of a nascent venture seems to be only influenced by the sector in which it operates. Conclusion & Discussion These results show that it is important to account for the timing of resource acquisition in theoretical frameworks that seek to explain the performance of nascent ventures since at least one performance indicator is significantly influenced by it. This study does suffer from some limitations. The analyzed sample is not perfectly representative of the population and the assumption is made that all resources are homogeneous. However, additional analyses find that, despite the limitations, the results are robust and suggest that the acquisition timing of a number of other resources can be influential on both creation speed and revenue as well.