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Catalyzing strategies and efficient tie formation: How entrepreneurial firms obtain investment ties

Journal

Academy of Management Journal

Subject

Strategy and Entrepreneurship

Authors / Editors

Hallen B L;Eisenhardt K M

Publication Year

2012

Abstract

Although network ties are crucial for firm performance, the strategies by which executives actually form ties are relatively unexplored. In this study, we introduce a new construct, tie formation efficiency, and clarify its importance for superior network outcomes. Building on fieldwork in nine Internet security ventures seeking investment ties, we unexpectedly identify two “equifinal” paths for how executives form ties efficiently. One relies on existing strong direct ties and is only available to privileged firms. The other relies on a second new concept, catalyzing strategies, a means by which executives advantageously shape opportunities and inducements to form ties that is available to many firms. Overall, we add insights to the network and signaling literatures and to the nascent literature on how strategic action, especially by low-power actors such as entrepreneurs, shapes critical network outcomes.

Keywords

Qualitative orientation; Research methods; Network Theory; Theoretical Perspectives; Financing of new ventures (IPOs, venture capital, etc.); Entrepreneurship

Available on ECCH

No


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