Relocation to Get Venture Capital: A Resource Dependence Perspective. (July 2019)

• Record Type: Journal Article
• Authors: De Prijcker, Sofie; Manigart, Sophie; Collewaert, Veroniek; Vanacker, Tom
• Is Part Of: Entrepreneurship theory and practice. Volume 43:Number 4(2019)
• Page Start: 697
• Page End: 724
• Publication Date: 2019-07
• Subjects: venture capital -- entrepreneurial finance -- relocation -- resource dependence theory; Small business -- Periodicals; New business enterprises -- Periodicals; Entrepreneurship -- Periodicals; 658.421
• DOI: 10.1177/1042258717739003
• Languages: English
• ISSNs: 1042-2587

Abstract

Using a resource dependence perspective, we theorize and show that non-venture-capital-backed ventures founded in U.S. states with a lower availability of venture capital (VC) are more likely to relocate to California (CA) or Massachusetts (MA)—the two VC-richest states—compared to ventures founded in states with a greater availability of VC. Moreover, controlling for self-selection, ventures that relocate to CA or MA subsequently have a greater probability of attracting initial VC compared to ventures that stay in their home state. We discuss the implications for theory, future research, and practice.