Unicorns and agency theory: Agreeable moral hazard?

The number of unicorns, startups valued over $1 billion, has steadily risen over the past decade. The abnormally high valuation of a unicorn from investors is based on their potential to disrupt a market and create a new paradigm. With this as the backdrop, this piece asks the question, what theoretical tools do we have to understand unicorns? Specifically, we explore agency theory. We argue that if principals and agents agree on the goal of disruption, then perhaps the agency problem that does occur in unicorns is beneficial, not a cost. Further, we argue that the principals of unicorns do want agents to take higher than normal risks with their investment to disrupt a given market. From this phenomenon, we introduce the concept of agreeable moral hazard and its use in the unicorn setting. Not only does the concept of agreeable moral hazard provide theoretical implications for future research, but it also highlights the need for more research to test existing theory on the unicorn population

Why small firms are different: Addressing varying needs from boards of directors

Board of director member diversity has an impact on the functions each director successfully provides. Appropriate and necessary board member capabilities differ between small and large firms. Although these differences seem apparent, current research has favored studies related to large firms and neglected those related to board member needs of small firms. Grounded in Agency Theory and Resource Dependence Theory, the following manuscript theoretically suggests that firm size moderates the relationship between board member diversity and the two primary functions (monitoring and the provision of resources) of board members. Furthermore, small firms can enhance performance through appropriate member composition in differing ways than large firms

Gender role congruity and crowdfunding success

Research on financial resource acquisition has indicated negative consequences for entrepreneurs that act feminine when trying to attract investors. Yet, does this remain true in crowdfunding, where there is a more diverse population of backers? To explore this, we take a gender role congruity perspective to see if gender roles align with crowdfunding success. More specifically, 2,071 entrepreneurs from Kickstarter were rated based on feminine (agreeableness and humility) and masculine (assertiveness and emotional stability) characteristics, and these characteristics were compared to whether or not the entrepreneur met the campaign goal. The results suggest that gender role congruity is a factor for successful crowdfunding, in that, for the most part, female entrepreneurs are rewarded for being more feminine and male entrepreneurs are rewarded for being more masculine. Only assertiveness was expected for both male and female entrepreneurs. Theoretical and practical implications are discussed from these findings

Sport business models: a stakeholder optimization approach

© 2020, Emerald Publishing Limited. Purpose: Owners of the US-based sport teams are seeing consistent gains on their financial investments, no matter the success of their teams on the playing field or their impact on the surrounding community. Sports teams are a part of an ecosystem comprised of primary and secondary stakeholders. The authors explore this phenomenon using a stakeholder perspective to understand how different business models and ownership structures optimize stakeholder value. Design/methodology/approach: The authors employ an evaluative conceptual approach to examine the dominant model in the US, European ownership structures and public-private partnerships (PPPs). T finalize these comparisons by exploring a fourth business model and ownership structure – a relatively unique option in the US deployed by the Green Bay Packers – which we refer to as the maximized value partnership (MVP). These comparisons are followed by practical advice for owners in regard to these governance mechanisms. Findings: The MVP ownership model has the potential to level the playing field between public and private actors. This potential is realized by fusing some of the best practices from European football clubs, in particular aspects of the stock market and supporter trust models. Originality/value: By evaluating the most common ownership structures for sports teams, t provide an alternative model as well as practical advice for owners

Straight OUTTA Detroit: Embracing Stigma as Part of the Entrepreneurial Narrative

Through an inductive field study, we set out to better understand how and why ventures would embrace a non-core stigma; this is perplexing given that a majority of stigma literature suggests that organizations tend to avoid/disidentify from stigmatized entities. To do so, we study organizational locational stigma, which we define as a label arising from an organization\u27s geographic location that evokes a collective stakeholder group-specific perception that an organization possesses a fundamental, deep-seated flaw that deindividuates and discredits the organization. Our findings from Detroit, Michigan reveal that entrepreneurs embrace the locational stigma by taking part in Detroit\u27s underdog narrative and comeback story. Entrepreneurs use the underdog narrative in hope of differentiating their ventures from those in other locations, while they leverage the comeback story to gain access to the resources and in-group advantages. We thus advance the concept of locational stigma and show how it can benefit organizations

Entrepreneurial ecosystem knowledge spillover in the face of institutional voids: groups, issues, and actions

The presence or absence of formal institutions impacts entrepreneurship potential and influences the paths of entrepreneurial ventures. When institutions are lacking or weak, institutional voids may be present. Knowledge spillover can mitigate problems caused by institutional voids by substituting for such voids or through sharing information about navigating these environments. We study the associated impacts on entrepreneurs and entrepreneurship ecosystems and how knowledge spillover is valuable within entrepreneurial ecosystems with institutional voids. Non-institutional drivers of entrepreneurship and examples of specific actions that are taken to stimulate entrepreneurship are also explored as a means of better understanding entrepreneurship activity within weak or failing institutions. To assess knowledge spillover in an entrepreneurial ecosystem with institutional voids, the U.S. city of Detroit, Michigan was selected and a content analysis was conducted using news articles related to “Detroit” and “entrepreneurship” from 2006–2018. The findings present valuable insights for cities or regions facing similar situations