Alex F. De Noble

After the cash arrives: A comparative study of venture capital and private investor involvement in entrepreneurial firms

Abstract Equity investments in entrepreneurial firms continue to grow in number and dollar amount from both venture capital and private investment sources. Increasingly, these two sources of capital play an important role in the development of new and existing entrepreneurial ventures. Due to the sometimes hurried attempt to turn their dream into reality, entrepreneurs may fail to consider similarities and differences in the value-added benefits supplied by venture capital firms (VCs) and private investors (PIs). Accordingly, the purpose of this study was to determine how initial relationships are established and maintained between entrepreneurs and their primary investors. Specifically, we asked entrepreneurs to assess characteristics of the relationship with their primary investor. We then contrasted the results between entrepreneurial firms that had received venture capital funding versus private investor funding. Differences were examined along the following lines: 1. • Levels of investor involvement in entrepreneurial firms 2. • Reporting and operational controls placed on the firm 3. • Types of expertise sought by the entrepreneur

Planning for post-merger integration—eight lessons for merger success

Abstract This article describes some acquisition pitfalls and how to avoid them. The authors explain how neglecting the post-merger integration process can undermine the performance of a strategically sound acquisition. They offer guidelines to improve the quality of acquisition planning and implementation.

Growth and early returns in technology-based manufacturing ventures

Abstract This study examines the variance in sales growth and discounted cash flows of 28 firms that entered into the manufacture of technology-based industrial goods via a public offering of securities. Explanatory variables include characteristics of industry structure, market strategy, and the experience of the management team. Results indicate that elements of market strategy (segmentation, sales extensions, and product performance advantages) have the greatest influence on NPV. Annual sales growth, while influenced by industry structure, is best explained by a combination of industry structure (concentration and number of direct competitors) and strategy variables. Almost 40% of the variance in each criterion can be explained.

Competitive strategy and high technology regional/site location decisions: A cross-country study of Mexican and U.S. electronic component firms

This study investigates differences on industry perceptions, competitive strategy, and the location concerns of high technology operations between electronic components firms in Mexico and the United States. Within this framework, we explore both differences and similarities in the way high technology firms compete and make regional and site specific location decisions. We also examine the way these firms view the importance of various strategic factors, such as pricing, marketing, and R&D, in contributing to overall competitive success. Results indicate that location preferences are both country-dependent and strategy-dependent.

Competitive strategy and flexible manufacturing: New dimensions in high-technology venture-based economic development

Abstract The recent proliferation of high-technology venture-based economic development beyond the well-established research centers of Santa Claras Silicon Valley, Bostons Route 128 and Carolinas Research Triangle, has raised important questions concerning the demands placed on a facilitys location by a modern high-technology firm. Historical arguments promoted the idea that venture capital opportunities intertwined with skilled engineering and professional networks, all propelled by the advanced technology spin-offs of major research universities and neighboring firms, were necessary both to attract and to retain existent high-technology enterprises and incubate new start-up ventures. Yet, current empirical research suggests that these oft-cited infrastructure requirements that fueled the “technopoli” high-technology centers are inadequate in their ability to explain the spatial tendencies and location behavior of modern technologybased enterprises. Accordingly, we argue that in order to more fully understand the economic dynamics of technology development, it is important to consider carefully the implications of competitive strategy and recent advances in manufacturing technology. Utilizing an empirically derived typology of competitive strategy for high-technology firms, we investigated the linkages between strategy and community infrastructure requirements at both the regional and site-specific levels of analysis. We also examined the impact of flexible manufacturing technologies on both actual and anticipated location behavior. To develop a relevant typology of competitive strategy for high-technology ventures, we incorporated elements of three important dimensions that frame a corporations overall strategy: manufacturing strategy, technology strategy and market strategy. Using a cluster analytic technique, three generic competitive strategy types were established: “technology mills,” “technology specialists,” and “technology mass producers.” Further statistical analyses indicated that these three strategies had significantly different infrastructure requirements at both the broad community level and the specific-site level. In addition, firms employing more flexible manufacturing technologies appeared to have very different spatial tendencies, and were more likely to shift production between various facilities. The results of this study have important implications at two levels: for high-technology economic development strategies and for corporate strategies. For the economic development officer or community planner, especially those involved with smaller communities without the vast and complex infrastructure of a Silicon Valley, this study suggests that a productive economic development strategy would be one that takes a relatively focused approach. These communities should encourage infrastructure development, provide appropriate government incentives, and establish community marketing plans by targeting firms with competitive strategies that value the type of infrastructure inputs the community can provide. For the corporate strategist, this study underlies the importance of closely integrating the location decision with the firms overall competitive strategy. Matching plant location with strategic thrust is often overlooked by corporations in their misplaced desire to simply find a low-cost solution.

Strategic scope, flexible manufacturing, and plant location in high technology firms

Abstract We theoretically argue that product-specific, inflexible manufacturing places important constraints on corporate strategy. Introducing flexible systems releases a firm from these constraints and provides an opportunity to develop new strategies. It encourages the internalization of scope economies, provides an incentive for basic R&D investment, and allows for inter-plant substitution and multiplant strategies, and broader diversification strategies. Empirical analyses of 128 high technology firms provides partial support.

Perceptions of Self-Employment Among Mid-Career Executives in the People’s Republic of China

Policy makers in transitional economies have recognized the importance of self-employment as a mechanism for economic growth. Institutional support, however, lags this recognition. Individuals, therefore, must draw on their personal characteristics to venture into self-employment. We used a variety of individual characteristics to capture an important antecedent of the transition to self-employment using data from 133 mid-career Chinese executives. At the most aggregate level, hierarchical regression showed that views on self-employment are positively related to having a self-employed relative and openness to experience. A more refined analysis indicated that a variety of individual characteristics are related to perceptions of self-employment. Using these findings, we conclude that public policy will create an environment of inter-generational entrepreneurial activity. We argued, moreover, that the continued transition from state-owned enterprises (SOEs) to privately owned enterprises will require the identification, training, and development of a new breed of self-employed individual.

Bank Involvement with Export Trading Companies

The Federal Export Trading Act of 1982 was designed to facilitate small business involvement in the international trade arena. Specifically, bank affiliated export trading companies (ETCs) represent a potent vehicle for internationally minded smaller firms to gain entree to world markets. This paper identifies and prioritizes the major reasons why banks would consider getting involved in such ventures.