How Starting Strategy and Network Structure Shape Problemistic Search: An Examination of Venture Capital Firms. (September 2022)

• Record Type: Journal Article
• Authors: Duke, Jake; Havakhor, Taha; Mui, Rachel; Parker, Owen
• Other Names: Bertoni Fabio guest-editor.; Bonini Stefano guest-editor.; Capizzi Vincenzo guest-editor.; Colombo Massimo G. guest-editor.; Manigart Sophie guest-editor.
• Is Part Of: Entrepreneurship theory and practice. Volume 46:Number 5(2022)
• Page Start: 1344
• Page End: 1373
• Publication Date: 2022-09
• Subjects: behavioral theory of the firm -- structural holes -- syndication networks -- portfolio strategy -- venture capital; Small business -- Periodicals; New business enterprises -- Periodicals; Entrepreneurship -- Periodicals; 658.421
• DOI: 10.1177/10422587211033574
• Languages: English
• ISSNs: 1042-2587

Abstract

Building on the behavioral theory of the firm, we empirically examine how starting strategies and syndication networks can influence venture capital (VC) firms' problemistic search. We propose that: (a) depending on a VC's strategic starting point, that is, the VC's extent of specialization, the directionality of problemistic search may change to either expanding or contracting search activities; and (b) depending on search direction, structural holes in syndication networks can either impede or facilitate the problemistic search process. In a sample of U.S. VC firms, we find results consistent with our predictions, which have important implications for entrepreneurship and organizational strategy research.