Exploring the evolution of supporter networks in the creation of new organizations

Abstract

Networks are important to entrepreneurial success. However, most research in this area to date has merely addressed the what; namely, what types of networks enable success. We seek to extend this stream of research by answering the how and the why. In so doing, we elaborate on how entrepreneurs can develop their networks, arguing that in order to create new organizations, nascent entrepreneurs must acquire resources from an increasingly diverse set of relatively stronger and weaker ties throughout the emergence phase. We then hypothesize why this evolutionary path is effective across the various dimensions of tie strength. Analyzing data from the Panel Study of Entrepreneurial Dynamics I (PSED I) with multilevel random coefficient growth curve modeling, we find strong support for our hypotheses. We conclude by discussing the implications of our findings for both academics and practitioners.