Venture Creation Speed and Subsequent Growth: Evidence from South America

Abstract

Though time is an important dimension of the venture creation process, our understanding of why some entrepreneurs are able to act more quickly than others is limited. Equally, not much is known about the relationship between venture creation speed and the subsequent venture growth. In this paper, we use a resource-based perspective to provide insights into the factors that quicken or retard venture creation and to explore how speed impacts on subsequent growth. This is important because the topic remains generally underresearched and because even less is understood about venture creation speed in the context of South American economies. Data were collected from face-to-face interviews with 647 entrepreneurs in Argentina, Brazil, Chile, and Peru. Using a multivariate regression framework, we find that entrepreneurs make use of their human and social capital resources to shape the speed by which their venture is created. Moreover, their perceptions of unfavorable environmental conditions seem to retard venture creation. Findings also suggest that entrepreneurs who take more time to create a more solid resource base tend to receive better growth outcomes. Implications from the findings are discussed.

Life course pathways to business start-up

“…Moreover, when education is allied to work experience, it creates 'experience corridors' (Doyle Corner and Ho 2010) that are valuable when applied to related businesses (Zanakis, Renko, and Bullough 2012). Relevant work experience supports opportunity recognition, speed of development and progression in the start-up process (see Marvel 2013;Dimov 2010;Capelleras et al 2010). Education and experience may, more generally, support entrepreneurial practice in understanding resources and shaping opportunity under conditions of uncertainty (see Keating, Geiger, and McLoughlin 2013).…”

The When and Why: Student Entrepreneurial Aspirations

“…Waiting may allow the correct opportunities to be identified and the relevant resources put in place, so those that wait may be more innovative and able to achieve greater growth in the future (Capelleras et al. ; West and Meyer ).…”

The role of entrepreneurship in transforming efficiency economies into innovation-based economies

“…In addition to this, entrepreneurship initiatives in these economies are constrained by the scarcity of resources (Ahlstrom & Bruton 2010) and the finance required to carry out innovative projects (Smallbone & Welter 2001). In these economies, although the venture creation speed is relatively fast, the growth is slow (Capelleras et al 2010).…”

“…As per these researchers, high-growth entrepreneurs basically represent opportunity-motivated ones (Lecuna, Cohen & Chavez 2017) because opportunity entrepreneurs are always keen for growth and recognise opportunities arising from innovative ideas, whereas necessity entrepreneurs intentionally avoid growth because their ultimate goal is survival (Capelleras et al 2010;Valdeza et al 2011). …”

“…Contrary to innovation-based economies, entrepreneurship in efficiency-driven economies is characterised by decreasing rates of self-employment (Acs, Desai & Hessels 2008), high levels of volatility (Pfeifer & Sarlija 2010), economic unpredictability (Ahlstrom & Bruton 2010), low entrepreneurial culture (Lee & Peterson 2000) and rampant numbers of necessity entrepreneurs who are mainly motivated by the lack of job opportunities or some other push factors (Yalcin & Kapu 2008) as well as low growth prospects and low aspirations (Capelleras et al 2010). …”