Jonathan T. Eckhardt

Opportunities and Entrepreneurship

This article extends and elaborates the perspective on entrepreneurship articulated by Shane and Venkataraman (2000) and Venkataraman (1997) by explaining in more detail the role of opportunities in the entrepreneurial process. In particular, the article explains the importance of examining entrepreneurship through a disequilibrium framework that focuses on the characteristics and existence of entrepreneurial opportunities. In addition, the article describes several typologies of opportunities and their implications for understanding entrepreneurship.

Multistage Selection and the Financing of New Ventures

Using a random sample of 221 new Swedish ventures initiated in 1998, we examine why some new ventures are more likely than others to successfully be awarded capital from external sources. We examine venture financing as a staged selection process in which two sequential selection events systematically winnow the population of ventures and influence which ventures receive financing. For a venture to receive external financing its founders must first select it as a candidate for external funding, and then a financier must fund it. We find evidence that founders select ventures as candidates for external finance based on their perceptions of market competition, market growth, and employment growth, while financiers base funding decisions on objective verifiable indicators of venture development, such as the completion of organizing activities, marketing activities, and the level of sales of the venture. Our findings have implications for venture financing and evolutionary theories of social processes.

An Update to the Individual-Opportunity Nexus

This chapter extends and elaborates the individual-opportunity nexus framework on entrepreneurship. First, the chapter discusses in detail the existence of entrepreneurial opportunities, and the processes of opportunity discovery and exploitation. Second, the chapter describes several typologies of opportunities. Third, the chapter discusses the importance of the locus of opportunity discovery and exploitation.

Opportunities in business model research

The business model concept is widely used by practicing entrepreneurs and scholarly research on the business model concept has made contributions to the management literature. This essay links the business model literature to the growing work on the individual–opportunity nexus—which is a developing scholarly framework in entrepreneurship. Three potential linkages of overlapping research are discussed including research on the development of entrepreneurial taxonomies and conjecture formation.

Technical Specialized Knowledge and Secondary Shares in Initial Public Offerings

This paper utilizes an understudied but often utilized aspect of initial public offerings (IPOs), secondary shares, to examine whether the knowledge conditions of firms give rise to agency problems that limit the ability of founders and venture capitalists to sell equity at IPO. In an analysis of 2,190 IPOs spanning from 1992 through 2002, we find that private owners are less likely to be observed selling their equity at IPO in ventures that are highly dependent on technical specialized knowledge as measured by the count of individuals with Ph.D.s in the top management team and board of directors. However, we find that this limit on the financial liquidity of founders and venture capitalists is alleviated when the ventures output has received greater market acceptance. Hence, the findings suggest that the financial liquidity of individuals involved in entrepreneurship is likely to be influenced by the knowledge conditions of their venture.