Social Networks, Funding, and Regional Advantages in Technology Entrepreneurship: An Empirical Analysis
Authors: Butler, John Sibley; Garg, Rajiv; Stephens, Bryan
Journal: Information Systems Research (2020)
<jats:p> With the increased penetration of digital technologies into entrepreneurship, the traditional need for proximity to specific locations or large amounts of funding for infrastructure development has diminished. Instead, digital entrepreneurs now pursue locations that provide more opportunities for funding (rounds) and greater social network support. Analyzing data for entrepreneurial ventures that were successful in receiving some external funding, we found that the number of funding rounds per year plays a significant and positive role in influencing start-up creation in that location—interestingly, amount of funding does not. Furthermore, local social network density creates stickiness to that location, thus negatively influencing entrepreneurs' willingness to relocate. If entrepreneurs do relocate to create a start-up after a short delay, larger social network density (in a new location) positively affects start-up creation decision in that location. Additionally, we find that midcareer individuals (such as millennials) are more likely than early-career or late-career stage individuals to create a successful technology start-up. Also, entrepreneurs are less likely to re…