The Two Sides of the Story: Network Investments and New Venture Creation

Thorsten Semrau and Arndt Werner

Journal of Small Business Management, 2012, vol. 50, issue 1, 159-180

Abstract: It is widely recognized that networks provide access to resources necessary for founding a new venture. However, they also come along with opportunity costs of time. We therefore argue that maintaining a set of network relationships is an investment that may not always pay off. More specifically, we develop detailed hypotheses on why the relationship between investing time in developing and maintaining a larger network and more intense network relationships and success in new venture creation may be best described by an inverted U. Testing our hypotheses on longitudinal data of 137 nascent entrepreneurs, we find broad support for our propositions.

Date: 2012
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DOI: 10.1111/j.1540-627X.2011.00348.x

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