Harry J. Sapienza

Effects of Age at Entry, Knowledge Intensity, and Imitability on International Growth

We employed knowledge-based theory to shed light on international growth in entrepreneurial firms. We found earlier initiation of internationalization and greater knowledge intensity to be associat...

A Capabilities Perspective on the Effects of Early Internationalization on Firm Survival and Growth

Recent critiques of internationalization process models question the wisdom of delaying internationalization. Internationalizing late allows firms to assemble resources and gain experience but also allows inertia to develop. We resolve this tension by positing that internationalization has differing effects on firm survival and growth. These effects are moderated by organizational age, managerial experience, and resource fungibility. Our framework provides insights into the evolution of capabilities across borders and may be tested and built upon by organization researchers.

Venture capitalist governance and value added in four countries

Research has identified the means by which venture capitalists (VCs) in the United States add value to their portfolio firms beyond money. The venture capital industry has expanded into other nations, and this study explores the relations of venture capitalists with their portfolio firms in the three largest European venture capital markets –- the United Kingdom, France and the Netherlands. Roles for VCs are categorized as strategic (e.g., providing business advice), interpersonal (e.g., mentoring the CEO), and networking (providing links to other resources). Utilizing agency and organization theory perspectives, this study analyzes governance and decision making issues from the viewpoints of the VCs. Perceived risks and uncertainty are hypothesized to increase the level of interaction between CEO and VC, and to increase the value added by such interaction. Interviews and surveys of venture capitalists and the CEOs of their portfolio firms were conducted in the US in 1987-1988. In 1982, a similar questionnaire was administered to VCs in the three European countries. Both similarities and differences were found among the four countries. In the US and the UK, for example, VCs interact more frequently with their portfolio firms, to monitor and assist them, than do those in France and the Netherlands. However, in all four countries VCs rate the greatest value added as strategic, and the least as networking. The situations in which VCs are likely to provide assistance are also examined. Further research is needed on the interaction between formal governance and more informal oversight.

The Effects of Top Management Team Size and interaction Norms on Cognitive and Affective Conflict

There is mounting evidence that effective top management teams engage in cognitive conflict but limit affective conflict. Cognitive conflict is task-oriented disagreement arising from differences in perspective. Affective conflict is individual-oriented disagreement arising from personal disaffection. This study of 48 TMTs found that team size and openness were positively related to cognitive conflict. While team size was also associated with greater affective conflict, when teams had high levels of mutuality, greater openness led to less affective conflict. The findings have implications for improving strategic decision making through the use of conflict.

When do venture capitalists add value

Explores when and if venture capitalists add value to the firms that they back. Focus in this analysis is on context and the venture capitalist-CEO relationship. Value is considered from the viewpoint of the ventures CEO and the lead venture capital investor. Data used were collected through survey and interviews with 51 venture capital-backed ventures in the United States. These ventures included service and low-tech firms but were primarily high-tech firms. The results did not support the proposition that venture capital is more valuable in earlier stages of the venture or when environmental uncertainty is high. Some support was shown for the hypothesis that high-tech ventures benefit more from venture capital. Frequent interaction between the venture capitalist and the CEO was shown to provide greater value, as was more open interaction between these parties. Finally, venture capitalist involvement is positively associated with venture performance. Given these findings, it is concluded that although money is important to the success of the venture, the venture capitalists themselves add value. The assistance of venture capitalists is especially useful to high innovation ventures. (SRD)

The internationalization of new high-potential U.S. ventures: antecedents and outcomes

This study examined the antecedents and outcomes of the internationalization of 61 new high-potential ventures in the U.S. The results indicate that internationalization is directly related to the use of product differentiation as a source of competitive advantage, the international work experience of the board of directors, and size at the point of the IPO. The use of low cost, product differentiation, or innovation as a source of competitive advantage, and size at the point of the IPO were directly related to sales growth in the two-year period following the IPO. Finally, the level of Internationalization at the time of the IPO is positively related to earnings two years later.

Impact of Agency Risks and Task Uncertainty on Venture Capitalist–CEO Interaction

This study examined the impact of agency risks and task uncertainty on venture capitalist-chief executive officer (VC-CEO) interaction. Results from 51 VC-CEO dyads indicate that the frequency of interaction depends on the extent of VC-CEO goal congruence, the degree of the CEOs new venture experience, the ventures stage of development, and the degree of technical innovation it is pursuing. However, contrary to conventional expectations, the degree of management ownership had no impact on the frequency of interaction.

Determinants of required return in venture capital investments: a five-country study

Using two complementary theoretical perspectives, we develop hypotheses regarding the determinants of the return required by venture capitalists and test them on a sample of over 200 venture capital companies (VCCs) located in five countries. Consistent with resource based theory, we find that early stage specialists require a significantly higher return than other VCCs when investing in later stage ventures. Consistent with financial theory, we find that acquisition /buyout specialists require a significantly lower return than other VCCs when investing in expansion companies. Furthermore, in comparison to specialists, highly stage-diversified VCCs require a significantly higher return for early stage investments. Independent VCCs require a higher rate of return than captive or public VCCs. In general, higher required returns are associated with VCCs providing more intensity of involvement, having shorter expected hold-ing period of the investment, and being located in the US or UK (in comparison to those in France, Belgium, and the Netherlands).

The entrepreneur and the initiation of new venture launch activities

Much of the previous research attempting to relate traits of the entrepreneur to new venture creation has failed to demonstrate a definitive linkage. This failure should not impugn the importance of the individual as the most cogent unit of analysis In entrepreneurship research and theory. On the contrary, since most new organizations are Initiated and created by individuals operating alone or in small teams, it should motivate new ways of modeling and testing the human phenomena involved In venture creation. Accordingly, this paper presents a structural model of the initiation of new venture creation which links psychological and behavioral concepts with those of organization theory to explain the initiation of launch activities for new business enterprises.

Entrepreneurial Team Formation: An Exploration of New Member Addition

We explored in this article the process of entrepreneurial team formation. As theory specific to this topic is scant, we drew first on disparate views of team formation and its correlates; we then called upon in–depth interviews to provide deeper, nuanced insights into this dynamic process of creation. Our focus is team member addition. We identified resource–seeking and interpersonal attraction as primary alternative motivators for new teammate addition; however, we also illustrated how these motivations may be complementary in practice. Finally, we considered in some depth how new member identification and selection processes may unfold as new ventures are formed.