Entrepreneurship and the Process of Obtaining Resource Commitments

Thomas Hellmann ()

Research Papers from Stanford University, Graduate School of Business

Abstract: Most theories of the firm ignore the entrepreneurial process of how the various resources of the firm are combined in the first place. This paper examines the process of how an entrepreneur obtains commitments from multiple resource providers to create a new venture. Resource providers may be reluctant to commit to an unproven concept, and the commitment of one gives external validation for the others. The entrepreneur has to decide in what order to approach potential providers. The optimal sequence is shown to depend on the entrepreneur's own credibility. When no resource provider wants to be the first to commit, the entrepreneur may shuttle between resource providers for a long time and the opportunity may evaporate before the venture ever gets started. Finally, the resource combination of a firm may differ from its first-best combination, either if the entrepreneur wants to retain a larger fraction of a smaller pie, or if inefficient resource providers are more willing to be the first to commit.

Date: 2000-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://gsbapps.stanford.edu/researchpapers/library/RP1704.pdf
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to gsbapps.stanford.edu:443 (certificate verify failed) (http://gsbapps.stanford.edu/researchpapers/library/RP1704.pdf [302 Found]--> https://gsbapps.stanford.edu/researchpapers/library/RP1704.pdf)

Related works:
Working Paper: Entrepreneurship and the Process of Obtaining Resource Commitments (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecl:stabus:1704

Access Statistics for this paper

More papers in Research Papers from Stanford University, Graduate School of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().