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Entrepreneurs (novices vs. experts) and investors: Interaction and rationality dynamics (effectual vs. causal)

Entrepreneurs (novice vs. expert) et investisseurs: interactions et dynamique des rationalités (effectuale vs. causale)

Laurence Cohen and Kirsten Burkhardt ()
Additional contact information
Laurence Cohen: Centre de Recherche Magellan - UJML - Université Jean Moulin - Lyon III - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon
Kirsten Burkhardt: CREGO - Centre de Recherche en Gestion des Organisations [Dijon] - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté

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Abstract: The paper studies the mechanisms that govern the interactions between the entrepreneur (novice or expert) and the specific investors of emerging firms (business angels (BAs) and venture-capital firms (VCs)). Combining both literatures on entrepreneurship and entrepreneurial finance, our aim is to understand if the rationalities of these three actors help them or not to interact, and, to study how they influence each other during the firm's growth. In order to do so, we undertake two processual case studies. Our results show that effectual rationality underlines the interaction between the entrepreneur and the BAs at the creation of the firm, whilst causal rationality is helpful in the search for VC-investors in order to enable the firm's rapid growth. Finally, the BAs (previous successful entrepreneurs) can play the role of an intermediary, helping the novice entrepreneur to move from an effectual to a causal reasoning which help them to attract financing sources from VCs

Keywords: growth of the firm; effectuation; venture capital; governance; causation; rationalités effectuale / causale; gouvernance; capital-risque; business angels; croissance de la firme; start-ups (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent and nep-sbm
Date: 2019-05-23
Note: View the original document on HAL open archive server: https://hal-univ-lyon3.archives-ouvertes.fr/hal-02177388
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Published in 18ème Conférence Internationale de Gouvernance (CIG), May 2019, Bruxelles, Belgique

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