Manigart, Sophie

Meuleman, Miguel

Vanacker, Tom

English

Using multiple longitudinal case studies of young biotechnology firms, we study differences 
in the financing process between high and low performing firms. Findings suggest that initial 
differences in the specialization of the investors with whom entrepreneurs affiliate early on, 
affect the ease with which firms attract (specialized) follow-on financing and firm 
performance. We demonstrate the role of the social context in shaping initial financing 
outcomes, as entrepreneurs limit their search for financing to one or a few investors with 
whom they have pre-existing ties. Additionally, our research provides a dynamic view of the 
financing process. We identify isolating mechanisms, including entrepreneurial learning and 
homophily and network considerations in investor syndication, which limit entrepreneurs 
when trying to adopt successful financing strategies implemented by competitors later on. A 
core contribution is that we theorize on evolutionary processes in the financing process. This 
new perspective advances our knowledge on dynamics in the financing process and opens 
multiple avenues for future research.This paper benefited from the comments of Gavin Cassar, Daniel Forbes, Hans Landström, Harry Sapienza,
Shaker Zahra, Academy of Management Meeting reviewers and participants from the 2008 Belgian Financial
Research Forum. We thank Bart Clarysse and his research team for generously granting access to their data on 
Flemish research based startups. The first author gratefully acknowledges the financial support of the 
Intercollegiate Center for Management Science (I.C.M.)

Vlerick Repository

Towards an evolutionary model of the entrepreneurial financing process: insights from biotechnology startups

https://repository.vlerick.com/bitstream/20.500.12127/2908/1/Vanacker_T_WP_TowardsanEvolutionaryModeloftheEntrepreneurialFinancingProcess.pdf

Towards an evolutionary model of the entrepreneurial financing process: insights from biotechnology startups

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