The Use And Effect Of Social Capital In New Venture Creation - Solo Entrepreneurs Vs. New Venture Teams

Date Added: Feb 2010
Format: PDF

This paper examines the use of social capital in the venture creation process. The authors compare solo entrepreneurs (n=182) and new venture teams (n=274) from a random sample of start-ups in innovative industries and test social capital use and its effects on firm performance. The results reveal that solo entrepreneurs and new venture teams do not differ in their degree of use of social capital. However, there are differences in the determinants of social capital use in both groups. They find that weak ties assist solo entrepreneurs and have positive significant effects on new venture performance. For team start-ups, they find no direct effect of social capital.