Development of entrepreneurial networks and their accompanied benefits and costs in young business ventures

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Development of entrepreneurial networks and their accompanied benefits and costs in young business ventures

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Title: Development of entrepreneurial networks and their accompanied benefits and costs in young business ventures
A multiple case study of technology startups in Germany
Author: Leitner, Larissa
Abstract: Building on network theory, this qualitative paper examines the founders’ perception of networks and their importance for young business ventures in the early growth stages in the technology sector in Germany. In addition, it assesses the benefits gained through the network and the accompanied costs of networking activities. In this multiple case study I used a mixture of inductive and deductive reasoning for the analysis, which includes 12 German startups from the existence to the success growth stage. For the empirical study, a total number of 16 interviews with founders of young business ventures were conducted, which led to insightful findings in the individual, as well as in the cross-case analysis. The findings emphasize the importance of networks for young business ventures as well as the constant enlargement of a broader and more versatile network of strong and weak ties. Growth stage, complexity, and the level of the technology involvement impact the importance and the reliability of either strong or weak ties. Companies in the survival and success growth stage with a complex involved technology rely mostly on strong ties, whereas weak ties are more valuable for companies in the existence and success growth stages with low technological complexity. These strong or weak ties support entrepreneurs in gaining various resources for their business, which range from support and motivation, business contacts, financial resources, to information and advice, reputation and legitimacy, opportunity recognition, and ideas and employees. Networking, however, can be cost-intensive and even though founders may not always think about the involved costs of networking, they are aware of the fact that time and energy, reciprocity and expected favors, reputation, tradeoff between forming new ties and using or dropping existing ties and trust as well as monetary costs accompany all networking activities.
URI: http://hdl.handle.net/10417/5842
Date: 2016-05-20
Pages: 135 s.
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