Lowell W. Busenitz

University of Oklahoma | ou · Division of Management

Uncertainty permeates the world of entrepreneurship. Yet, understanding how entrepreneurs perceive and make decisions in the face of uncertainty remains elusive. The value of Bayesian decision models with their probabilistic-based assumptions is only of limited help to entrepreneurs in solving the problem of uncertainty. This research extends the u...

International entrepreneurship (IE) has emerged as its own domain—born out of the intersection of international business and entrepreneurship research. This fusion of disciplines has provided considerable value for international business by expanding its traditional focus beyond corporations to include new ventures. However, following an early peri...

Emerging evidence suggests that there is a meaningful link between overseas experience and entrepreneurial activity. However, we find very limited inquiry at the individual-level into why cross-cultural exposure seems to enhance proclivities to engage in entrepreneurship. Drawing from Schema Theory, we argue that breadth of cross-cultural experienc...

With the emergence of equity crowdfunding, understanding the human capital characteristics needed for running new ventures and the signals they send to prospective investors is of central importance. In focusing on this gap, our results reveal the importance and detrimental impact of specific human capital characteristics on funding (from startup e...

This paper addresses how business models inform viability of different fluoride treatment technologies for developing countries aswell as the pursuit of financial and operational sustainability. Excess fluoride concentrations in drinking water supplies negatively impact the health of communities living in fluoride affected regions of the world by c...

Equity financing in entrepreneurship primarily includes venture capital, corporate venture capital, angel investment, crowdfunding, and accelerators. We take stock of venture financing research to date with two main objectives: (a) to integrate, organize, and assess the large and disparate literature on venture financing; and (b) to identify key co...

This paper delineates the conceptual domain of dual-identity social entrepreneurship (DISE) and grounds its components theoretically. DISE entails the creation of ventures whose business model is designed by individual founders to create demonstrable and continued public value from strategic actions while simultaneously creating continued economic...

Research in entrepreneurship has been booming, with perspectives from a range of disciplines and numerous developing schools of thought. It can be difficult for young scholars and even long-time researchers to find their way through the lush garden of ideas we see before us. The purpose of this book is to map the research terrain of entrepreneursh...

Entrepreneurial learning is a critical, yet challenging, component of entrepreneurship. As the environmental landscape for entrepreneurs evolves, it is imperative that both entrepreneurs and scholars alike seek new ways to address learning obstacles and discover how entrepreneurs learn. The purpose of this paper is to better learn how entrepreneurs...

PurposeSocial entrepreneurs often make public appeals for funding to investors who are motivated by nonfinancial considerations. This emerging research context is an opportunity for researchers to expand the bounds of entrepreneurship theory. To do so, we require appropriate research tools. In this chapter, we show how computer-aided text analysis...

Microfinance provides a means for impoverished entrepreneurs to climb out of poverty through forming their own ventures. Given its promise as a weapon against poverty, scholars have become increasingly interested in this topic. However, relatively little is known about the investor-entrepreneur relationship in the context of microfinance. In this p...

In order to identify shifts and trends in the entrepreneurship literature over the past 25 years, we conduct a bibliometric study involving new data from the 2000–2009 era building on 1985–1999 data to study entrepreneurship research published in the major management journals. Our findings indicate that entrepreneurship articles now have a signific...

Technology-based ventures face considerable challenges when attempting to raise early-stage capital during the early-stages of development. To create an operational business they need access to financial capital, but external investors prefer to see an operational business before investing capital. This study extends arguments grounded in dynamic m...

As entrepreneurship research has matured, scholars have increasingly recognized that the formation of new ventures is commonly accomplished by teams as opposed to lone entrepreneurs. Over the past two decades, the upper echelons perspective has served as the primary lens for investigating new venture team functioning and performance. However, resea...

While lack of access to consistent safe drinking water is estimated to affect nearly 2 billion people worldwide, many of the efforts to solve this crisis have proven to be unsustainable. This paper discusses some of the reasons for these challenges and suggests interdisciplinary practices that could be integrated from the very beginning of a water...

Resource-based logic contends that firm performance is a product of superior resource endowments. Yet, many firms initiate operations with significant resource constraints and still generate superior performance. In this study, we explore how the commercialization of radical innovations constrains the growth of technology-based ventures, and how in...

While significant research has focused on the activities venture capitalists engage in that may add value to their portfolio companies, this work has not examined how these activities affect the entrepreneur-venture capitalist relationship. Accordingly, in this paper, we introduce the perceived investor support construct by adapting the perceived o...

New venture teams (NVT) often comprise idea‐conceiving founders and equity‐based investors. These subgroups represent a faultline whose magnitude influences the quality of business opportunities. We propose that the faultline strength formed between founders and investors is influenced by structural factors (ownership equity, membership change, pre...

This article evaluates the emergent academic field of entrepreneurship to better understand its progress and potential. We apply boundary and exchange concepts to examine 97 entrepreneurship articles published in leading management journals from 1985 to 1999. Some evidence was found of an upward trend in the number of published entrepreneurship art...

Resource-based theory contends that the manner in which firms are organized plays a critical role in determining whether resources can be leveraged to create wealth. Although numerous factors influence organizing decisions, prior research in the heterogeneous resource approach contends that individual resources are the causal driver in the process...

Sensemaking frameworks are used to develop the metaphor of shifting, multidimensional fitness landscapes mentally embedded in increasing higher levels of abstraction. Cognitive maps illustrate the simplified visualization used by early stage venture capitalists (VCs) to understand venture risk. Risk assessments of new, high-growth potential venture...

This study seeks to better understand why some individuals decide to start new businesses and others do not, particularly in light of high base rates of failure. In addressing the question of "Why do some individuals choose to start new ventures?" a common perspective is that potential entrepreneurs with high levels of confidence in potential outco...

The recognition and development of new opportunities are at the heart of entrepreneurship. Building from Kirzner's (1973, 1999) work, cognition theory, and McMullen and Shepherd's (2006) recent development, we offer a model involving three distinct elements of alertness: scanning and search, association and connection, and evaluation and judgment....

To reduce information asymmetries for potential investors considering investment in an IPO venture, owners can signal the firm's longer-term viability and quality in several ways. The lockup period, is one signal that can be offered. We investigated the lockup period of a sample of 640 ventures going through the IPO and find that a longer lockup pe...

Entrepreneurs with firm-specific human capital represent both a potential source of competitive advantage and a threat to appropriate the rents that are ultimately generated by a new venture. This situation presents interesting agency and resource dependence challenges. While potential investors in these ventures will want assurances that their int...

Undercapitalization in early-stage ventures is one of the most challenging obstacles to success facing entrepreneurial startups (Holtz-Eakin, Joulfaian, & Rosen, 1994). Limited research has probed this area and it is often atheoretical with key concepts not rigorously defined (Thornhill & Amit, 2004). In this study we propose a definition of underc...

A central tenet of resource-based logic is that undervalued resources utilized by firms organized to exploit them will produce superior economic performance over the long run. Yet when young technology-based ventures pursuing new opportunities do not possess full property over these resources, input providers retain the right to bid up factor price...

We contribute to multiple agency theory by examining cases in which ventures making initial public offerings (IPOs) have managerial agents on their boards whose goals conflict with those of the investment bank agents hired to underwrite the stock. Underwriters have an incentive to underprice IPOs to maintain strong ties with institutional investors...

Company experiences and research results suggest that small businesses and independent entrepreneurial ventures may have superior product invention skills while larger corporations may have superior innovation management skills (i.e., the skills required to maximize the marketplace return of product innovations). Although 80 percent of the world's...

We examine the impact of the governance in entrepreneurial firms at the time of the IPO focusing on market valuation based on whether the founder is still with the company. Using agency theory to explain the governance devices (and their purpose), we probe their impact on firm valuation. We develop hypotheses using concepts from psychological owner...

In this article, we take note of advances in the entrepreneurial cognition research stream. In doing so, we bring increasing attention to the usefulness of entrepreneurial cognition research. First, we offer and develop a central research question to further enable entrepreneurial cognition inquiry. Second, we present the conceptual background and...

After going through the initial public offering (IPO), new ventures face increased competition, greater public examination, and increased government scrutiny. Resource base weaknesses and external forces pose severe threats to the survival and success of new ventures. Building from resource-based theory, we first examine and delineate dynamic capab...

According to signaling theory, new venture teams (NVTs) can communicate to venture capitalists and other potential investors both a “value” signal and a “commitment” signal, based on the level of personal investment in a venture. Venture capitalists (VCs) typically want to know if a NVT is really committed to a venture and if its members truly beli...

Through mapping both distinctive and inclusive elements within the domain of entrepreneurial cognition research, we accomplish our task in this introductory article to Volume 2 of the Special Issue on Information Processing and Entrepreneurial Cognition: to provide a fitting backdrop that will enhance the articles you will find within. We develop a...

This study examines the interorganizational relationships among venture capitalists (VCs) and new venture teams (NVTs) for their contribution to long-term improvement in the performance of a venture. Research in (1) learning assistance, (2) NVT dismissal and (3) procedural justice provide important insights into the unique interorganizational relat...

The dynamic ownership arrangements surrounding the venture capitalist–entrepreneur (VC-E) relationship inherent in new ventures make the examination of principals’ or venture capitalists’ (VCs) and agents’ (entrepreneurs) governance arrangements interesting to explore. This article examines the limitations of agency theory and then stewardship theo...

Evidence suggests habitual entrepreneurs (i.e. those with prior business ownership experience) are a widespread phenomenon. Appreciation of the existence of multiple entrepreneurial acts gives rise to the need to examine differences between habitual and novice entrepreneurs (i.e. those with no prior business experience as a founder, inheritor or pu...

This article explores how venture capitalists (VC) add value to the ventures in which they invest through governance and reputation effects in the product market. Because VC are usually heavily involved in governance activities, experienced in aligning the goals of managers with owners, and experts at monitoring firms in their portfolio, they are l...

This article evaluates the emergent academic field of entrepreneurship to better understand its progress and potential. We apply boundary and exchange concepts to examine 97 entrepreneurship articles published in leading management journals from 1985 to 1999. Some evidence was found of an upward trend in the number of published entrepreneurship art...

The failure of past “entrepreneurial personality”—based research to clearly distinguish the unique contributions to the entrepreneurial process of entrepreneurs as people, has created a vacuum within the entrepreneurship literature that has been waiting to be filled. Recently, the application of ideas and concepts from cognitive science has gained...

This article is for venture capitalists (VCs) and managers belonging to a new venture team (NVT) who are interested in understanding factors that lead to NVT dismissal. Because dismissals can be a costly and ineffective way to improve venture performance, it is in a VCs interest to know when to avoid funding ventures that are likely to be impacted...

While venture capitalists are often considered to be expert decision makers, inaccuracies in their judgment are widely evident. To be successful and profitable on a continuing basis, VCs need to be able to cut their losses in a timely manner and get out of investments that are not materializing as expected. This study examines VC investment pattern...

Develops and applied the ideas of the resource-based theory to entrepreneurship; both share the same level of analysis, the firm. Extends the concepts of resources to include the various cognitive abilities possessed by the individual entrepreneur to create and combine new heterogenous resources. The first goal of this analysis is to describe activ...

Agency theory, the predominant theoretical lens employed to examine leveraged buyouts, focuses on buyouts principally as a governance and control device. This view is especially useful in evaluating mature firms where discipline, incentives and limits to managerial discretion serve to mitigate the destruction or the downside of firm value. In contr...

Buyouts, especially leveraged buyouts, have been perceived historically as on organizational efficiency tool to streamline organizational processes, reduce workforces, and decrease unit costs. This efficiency approach has been especially useful with mature firms, where the structure of debt and limits to managerial spending decrease the downside ri...

Sensemaking frameworks are used to develop the metaphor of shifting, multidimensional fitness landscapes mentally embedded in increasing higher levels of abstraction. Cognitive maps illustrate the simplified visualization used by early stage venture capitalists (VCs) to understand venture risk. Risk assessments of new, high-growth potential venture...

This study introduces and validates a measure of country institutional profile for entrepreneurship consisting of regulatory, cognitive, and normative dimensions. Subscales based on data from six countries show reliability, discriminant validity, and external validity. The instrument provides researchers with a valuable resource for exploring why e...

We examine the upside potential of privatization of both publicly traded firms and state-owned enterprises through the lens of agency and entrepreneurial cognition theory. In addition to managerial incentives, we argue that significant entrepreneur-ial progress is made through a cognitive shift from a managerial to an entrepreneurial mindset. The t...

Risk taking has long been a central theme of the entrepreneurship literature. However, research on the risk propensity of entrepreneurs has met with virtually no empirical support even though entrepreneurs consistently engage in risky events. This article attempts to resolve this paradox by examining entrepreneurial risk through the lens of cogniti...

This paper investigates how a variety of conditions in place at the time of first-round funding can frame a new venture team's (NVT) perception of the fairness of its relations with its venture capitalists (VC). It assumes that a team's perception of whether its treatment by its VC is procedurally just will affect a team's receptivity to VC advice....

Investigates the differences in decision-making processes used by managers in large organizations and entrepreneurs. These differences are examined with respect to two biases and heuristics: overconfidence and representativeness. Overconfidence is defined as overestimating the probability of being right, while representativeness is defined as the t...

This article is for venture capitalists (VCs) and managers belonging to a new venture team (NVT) who are interested in understanding factors that lead to NVT dismissal. Because dismissals can be a costly and ineffective way to improve venture performance, it is in a VCs interest to know when to avoid funding ventures that are likely to be impacted...

When firms face declining financial performance, research suggests that cost and asset retrenchment can lead to improved performance among poorly performing firms. However, previous studies have largely focused on firms operating in mature industries. This research develops and tests arguments that cost and/or asset retrenchment strategies will hav...

In taking an economic and behavioral approach, Kaish and Gilad (1991) recently tested Kirzner's (1973) theory of alertness which asserts that entrepreneurs are more alert to new opportunities and use information differently. Because of the lack of generalizable samples and the exploratory nature of the Kaish and Gilad study, this research replicate...

This paper presents a theory-based rationale that new venture team managers may utilize to reduce the cost of monitoring their venture. Because monitoring is costly and is eventually charged back to the venture, the present analysis suggests that there is at least one way for managers to protect their equity stake from such assessments. Drawing on...

Prior research examining whether venture capital firms (VCs) add value to the ventures in their portfolios by advising their new venture teams (NVTs) has led to inconclusive results. Whereas most prior studies have assumed that NVTs value VC assistance, this study tests for the possibility that they differentially value two different types of VC as...

Finding good, generalizable samples has long been an Achilles heel for those interested in entrepreneurship-related phenomena. Practitioners, policy makers, and researchers frequently desire to take the pulse of entrepreneurial activity but struggle in doing so. For example, Friedman (1995) reported that California overestimated job loss by 2.4 tim...

Two types of opportunism, managerial and competitive, are described. Contractual covenants that control these types of opportunism are used when they are likely to occur, i.e., when there are obstacles to monitoring management behavior and when returns to starting new firms are large. These ideas are subjected to empirical test. The relationship be...

This empirical study investigates the use of general versus niche marketing strategies within the nonprofit professional services sector. Using new churches as the unit of study, a more general strategy was found to make the greatest contribution toward numerical growth of the organization. Both general and focused approaches were found to have sig...

Best Paper

The lockup period is an agreement by the current owners of a new venture to not sell or dispose of their shares without the approval of the investment banker underwriting the shares of the initial public offering (IPO). We investigated the lockup period of a sample of 313 new ventures going through the IPO and find that a longer lockup period acts...

We examine the impact of the governance in entrepreneurial firms at the time of the IPO focusing on market valuation based on whether the founder is still with the company. Using agency theory to explain the governance devices (and their purpose), we probe their impact on firm valuation. We develop hypotheses using concepts from psychological owner...

In the wake of macroeconomic changes, entrepreneurs often pursue new opportunities by developing, recombining, and integrating the necessary resources into new configurations which reshape the very patterns of competition. As such, the skills and capabilities of entrepreneurs are intricately linked to the resources and capabilities of the venture....

The central premise of the resource management perspective (Sirmon, Ireland, & Hitt, 2007) in resource-based theory contends that resources must be actively managed in dynamic environments to produce superior economic performance over the long-run. However, before resources can be actively bundled and leveraged to create economic value, the firm’s...