V-S4

SUMMARY

WHOSE NETWORK IS IT? THE STRATEGIC ACCUMULATION AND LEVERAGING OF SOCIAL NETWORKS BY ALPHA ENTREPRENEURS

Helle Neergaard, The Aarhus School of Business, Denmark

Principal Topic

It is widely recognised that network relationships in general play a significant role in the development of a business. The current study sets out to discuss the existence of lead entrepreneurs in entrepreneurial teams. It seeks to explore the importance of their networking behaviour in founding and growing new ventures in order to address the question: why are some entrepreneurial ventures better survivors and financial performers than others?

Method

The empirical research targeted the IT and biotech/ medico sectors in- and outside Danish incubator environments and comprised two parts: (1) a web-survey answered by 59 entrepreneurial ventures (123 ventures were contacted) and (2) 58 interviews with founders of 24 new ventures. 13 of the 24 ventures were established by an entrepreneurial team, which consisted of between two and five founders. Alpha entrepreneurs were identified through other team members’ statements about networking patterns. As the initial research is explorative in character, this paper emphasizes the qualitative data.

Results and Implications

The study showed that the existence of a lead entrepreneur was more pronounced in teams of three or more entrepreneurs than in teams of two. The findings generally suggest that there is indeed a “team leader”—an alpha entrepreneur. The findings also indicate that it is not so much the inherent personality, nor the general management skills, as the lead entrepreneur’s ability to build and use networks and strategically that is instrumental in founding and growing a new venture. Lead entrepreneurs tend to differ from other members of the entrepreneurial team in their networking behaviour as well as age. Lead entrepreneurs are typically appointed CEO of the venture they co-found. It seems that there may be a link between the alpha entrepreneurs networking activities and venture performance. It is therefore crucial that newly founded ventures need to focus more effort on network building and support those persons who are the prime movers in this respect. The findings also suggest that it may be advantageous for venture capitalists to include networking capabilities in their evaluation of possible investment targets.

CONTACT: Helle Neergaard, Department of Organisation and Management, The Aarhus School of Business, Haslegaardsvej 10, 8210 Aarhus V, Denmark; (T) + 45 89 48 66 07; (F) + 45 86 15 50 32; hen@asb.dk