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Entrepreneurial growth actions and their financial consequences in a start-up: insights from a low cost airline venture in a competitive environment

Mukund R. Dixit, Amit Karna and Sunil Sharma

Venture Capital, 2008, vol. 11, issue 4, 361-378

Abstract: This paper investigates the financial consequences of entrepreneurial growth actions in a start-up. It argues that the growth actions in a start-up create an imbalance in the demand for and supply of money for the start-up. This imbalance does not hurt if the external business environment is munificent. However, if the environment turns hostile the imbalance may force the entrepreneur to take crisis decisions that destroy the very texture of the venture. We develop insights into this situation by tracing the development of a low cost airline venture in India. We identify two distinct growth phases: early growth and emergent growth. We present a comparative analysis of these two phases on different parameters: growth actions of the venture, financial consequences, stance of the environment and implications for the texture of the venture. The paper concludes with a discussion on start-up aspirations, growth actions, financial imbalance and maintenance of the texture of the venture.

Date: 2008
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DOI: 10.1080/13691060903184779

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