Entrepreneurship

Entrepreneurship is a featured research topic and an initiative at Harvard Business School

Our long tradition of research in Entrepreneurship goes back to the 1930's and 1940's with the “the father of venture capitalism,” General Georges Doriot, and Joseph Schumpeter’s theory of innovation as a process of “creative destruction.” Building on our intellectual roots, our scholars come from disciplines including economics, finance, sociology, strategy, business history, management, and social entrepreneurship. A number of our faculty come from practice as venture capitalists and start-up founders. We focus our research on the identification and pursuit of entrepreneurial opportunities; domestic and international funding of entrepreneurial endeavors; innovation, particularly technological innovation in international ventures; the environments in which entrepreneurs make decisions; and social entrepreneurship. As our research contributes new insights, we are advancing the world’s understanding of complex entrepreneurial issues and helping to increase the entrepreneurial success of our students and practitioners worldwide.

Featured Works

Article | Journal of Economic Perspectives
Entrepreneurship as Experimentation
William R. Kerr, Ramana Nanda and Matthew Rhodes-Kropf
Entrepreneurship research is on the rise, but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.
Keywords: Entrepreneurship; Innovation and Invention;

Citation:
Kerr, William R., Ramana Nanda, and Matthew Rhodes-Kropf. "Entrepreneurship as Experimentation." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 25–48. View Details
Cite View Details Read Now Related
Case | HBS Case Collection | January 2014 (Revised October 2014)
Andreessen Horowitz
Thomas R. Eisenmann and Liz Kind
Andreessen Horowitz (a16z), a venture capital firm launched in 2009, has quickly broken into the VC industry's top ranks, in terms of its ability to invest in Silicon Valley's most promising startups. The case recounts the firm's history; describes its co-founders' motivations and their strategy for disrupting an industry in the midst of dramatic structural change; and asks whether a16z's success to date has been due to its novel organization structure. a16z's 22 investment professionals are supported by 43 recruiting and marketing specialists—an "operating team" that is an order of magnitude larger than that of any other VC firm. Furthermore, the operating team aims to not only assist a16z portfolio companies, but also to be broadly helpful to all parties in the Silicon Valley ecosystem, including search firms, journalists, PR agencies, and Fortune 500 executives. The bet: by providing "no-strings-attached" help to ecosystem partners, the partners might someday reciprocate by steering founders seeking funding to a16z. The case closes by asking whether a16z should seek to double its scale over the next years.
Keywords: Business Model; Venture Capital; Disruption; Entrepreneurship; Industry Structures; Financial Services Industry; California;

Citation:
Eisenmann, Thomas R., and Liz Kind. "Andreessen Horowitz." Harvard Business School Case 814-060, January 2014. (Revised October 2014.) (request a courtesy copy.) View Details
Cite View Details Educators Purchase Related
Background Note | HBS Case Collection | February 2014
Raising Startup Capital
Jeffrey Bussgang
Entrepreneurs typically focus their full energies on business-building. But raising capital is a core part of building a valuable business. Developing expertise in raising capital is more than a necessary evil, it is a competitive weapon. Master it and you will be in a better position to make your company a massive success. But how do you finance a new venture? In this note, I will try to help answer this question by addressing the following topics:
• Types of funding. The two major types of startup capital are equity funding and debt funding although there are a few hybrid flavors as well.
• Sources of funding. These include venture capital firms, angel investors, crowd-funding, and accelerators/incubators.
• What investors look for. Each source has a different funding process and set of criteria which you need to understand before seeking funding from that source.
• The mechanics of equity funding. Seeking and securing funding involves setting amounts, agreeing to terms, and defining relationships.
Keywords: fund raising; venture capital; venture capital term sheet; venture creation/development; venture investing; venture philanthropy; entrepreneurial finance; entrepreneurial management; entrepreneurs; entrepreneurship; Jumpstart Our Business Startups (JOBS) Act; Non-equity financing; Convertible notes; convertible debt; debt financing; Raising Capital; National Venture Capital Association; venture capital firm compensation; crowdfunding; crowd-funding; Startup; start-up; startup management; Startups; angel investors; angels; accelerator; Venture Capital; Financing and Loans; Entrepreneurship; Business Startups; Financial Services Industry; United States;

Citation:
Bussgang, Jeffrey. "Raising Startup Capital." Harvard Business School Background Note 814-089, February 2014. View Details
Cite View Details Educators Purchase Related
Article | Review of Financial Studies | January 2014
The Consequences of Entrepreneurial Finance: Evidence from Angel Financings
William R. Kerr, Josh Lerner and Antoinette Schoar
This paper documents that ventures that are funded by two successful angel groups experience superior outcomes to rejected ventures: they have improved survival, exits, employment, patenting, web traffic, and financing. We use strong discontinuities in angel funding behavior over small changes in their collective interest levels to implement a regression discontinuity approach. We confirm the positive effects for venture operations, with qualitative support for a higher likelihood of successful exits. On the other hand, there is no difference in access to additional financing around the discontinuity. This might suggest that financing is not a central input of angel groups.
Keywords: Business Ventures; Financing and Loans; Interests; Employment; Patents; Web; Operations; Entrepreneurship; Business Exit or Shutdown;

Citation:
Kerr, William R., Josh Lerner, and Antoinette Schoar. "The Consequences of Entrepreneurial Finance: Evidence from Angel Financings." Review of Financial Studies 27, no. 1 (January 2014): 20–55. View Details
Cite View Details Read Now Related
Case | HBS Case Collection | September 2014 (Revised December 2014)
The Ullens Center for Contemporary Art
Mukti Khaire and Nancy Hua Dai
Since its opening in Beijing in November 2007 as the first non-profit art center in China, UCCA had been operating with the mission to "promote the continued development of the Chinese art scene, foster international exchange, and showcase the latest in art and culture to hundreds of thousands of visitors each year." For the past six years, UCCA had worked with more than 100 artists and designers to present 87 art exhibitions and 1,826 public programs to over 1.8 million visitors, including many important leaders from all over the world. Given the context of the economic and political environment in the rapidly changing Chinese art market, the founders and senior management of UCCA wondered what they could do to achieve growth and financial viability while continuing to realize their mission.
Keywords: art world; art gallery; art market; Arts; Nonprofit Organizations; Entrepreneurship; China;

Citation:
Khaire, Mukti, and Nancy Hua Dai. "The Ullens Center for Contemporary Art." Harvard Business School Case 815-022, September 2014. (Revised December 2014.) View Details
Cite View Details Educators Purchase Related
Discussion Paper | 2014
The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?
Dina D. Pomeranz
The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innovations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end world poverty and promote female empowerment, others condemned it as a disaster for the poor. Female empowerment has often been seen as one of the key promises of the industry. In part, this is based on the fact that more than 80% of its poorest clients, i.e., those who live on less than $1.25/day, are women. This paper discusses what we have learned so far about the potential and limits of microfinance and how insights from research and practice can help inform the industry's current products, policies and future developments.
Keywords: Microfinance; Entrepreneurship in emerging markets; entrepreneurship; gender; Women's Empowerment; entrepreneurs; Saving; savings; credit; credit supply; Insurance; Development economics; development finance; Behavioral economics; Gender; Microfinance; Social Entrepreneurship; Developing Countries and Economies; Banking Industry; Public Administration Industry; Financial Services Industry; Insurance Industry; Latin America; Kenya; Chile; India; Asia; Africa;

Citation:
Pomeranz, Dina D. "The Promise of Microfinance and Women's Empowerment: What Does the Evidence Say?" EY Thought Leadership Series, February 2014. View Details
Cite View Details Read Now Related

Recent Publications

Article | Research Policy | November 2019
Conversations and Idea Generation: Evidence from a Field Experiment
Sharique Hasan and Rembrand Koning
When do conversations lead people to generate better ideas? We conducted a field experiment at a startup boot camp to evaluate the impact of informal conversations on the quality of product ideas generated by participants. Specifically, we examine how the personality of an innovator (openness to experience, capturing creativity) and the personalities of her randomly assigned conversational peers (extroversion, measuring willingness to share information) affects the innovator's ideas. We find that open innovators who spoke with extroverted peers generated significantly better ideas than others at the boot camp. However, closed individuals produced mediocre ideas regardless of the individuals they interviewed, suggesting limited benefits of conversations for these people. More surprisingly, open individuals, who are believed to be inherently creative, produced worse ideas after they spoke with introverted peers, suggesting individual creativity's dependence on external information. Our study demonstrates the importance of considering the traits of both innovators and their conversational peers in predicting who will generate the best ideas.
Keywords: peer effects; field experiment; Interpersonal Communication; Creativity; Personal Characteristics; Entrepreneurship; Innovation and Invention;

Citation:
Hasan, Sharique, and Rembrand Koning. "Conversations and Idea Generation: Evidence from a Field Experiment." Art. 103811. Research Policy 48, no. 9 (November 2019). View Details
Cite View Details Find at Harvard Read Now Related
Working Paper | 2019
Keeping the Little Guy Down: A Debt Trap for Lending with Limited Pledgeability
Ernest Liu and Benjamin N. Roth
Microcredit and other forms of small-scale ﬁnance have failed to catalyze entrepreneurship in developing countries. In these credit markets, borrowers and lenders often bargain over not only the division of surplus but also contractual ﬂexibility. We show these lending relationships may lead to endogenous poverty traps for poor borrowers if future income is not pledgeable, yet richer borrowers unambiguously beneﬁt. Improving the bargaining position of rich borrowers can harm poor borrowers, as the lender tightens restrictions and prevents them from growing. The theory rationalizes the low average impact and low demand of microﬁnance despite its high impact on larger businesses.
Keywords: Entrepreneurship; Developing Countries and Economies; Microfinance; Problems and Challenges;

Citation:
Liu, Ernest, and Benjamin N. Roth. "Keeping the Little Guy Down: A Debt Trap for Lending with Limited Pledgeability." Working Paper, March 2019. View Details
Cite View Details Read Now Related
Case | HBS Case Collection | October 2019
C16 Biosciences: Lab-Grown Palm Oil
Jeffrey J. Bussgang and Olivia Hull
Synthetic biology start-up C16 Biosciences wants to solve a big problem: replace palm oil, a major contributor to deforestation and climate change, with a lab-grown substitute. CEO Shara Ticku has ambitious plans to supply her lab-grown palm oil to food manufacturers, who use palm oil liberally in a variety of products from ice cream to margarine. In bringing her product to market, Ticku faces a tough decision. Should she roll out the product first in the personal care market, which has lower volumes and premium prices, or go straight for food? The meteoric rise of lab-grown meat company Impossible Foods has caught the attention of an investor, who wonders if C16 should tap into excitement about lab-grown foods to raise a Series A funding round. But are there merits to starting small?
Keywords: Entrepreneurship; Venture Capital; Supply Chain Management; Corporate Social Responsibility and Impact; Mission and Purpose; Natural Environment; Environmental Sustainability; Science-Based Business; Weather and Climate Change; Social Enterprise; Business Startups; Plant-Based Agribusiness; Agribusiness; Food; Social Entrepreneurship; Globalized Markets and Industries; Goods and Commodities; Corporate Accountability; Growth and Development; Innovation Strategy; Technological Innovation; Working Conditions; Product Marketing; Product Positioning; Supply and Industry; Product Development; Production; Corporate Strategy; Agriculture and Agribusiness Industry; Beauty and Cosmetics Industry; Biotechnology Industry; Consumer Products Industry; Food and Beverage Industry; North and Central America; Boston; Massachusetts; New York (city, NY); Southeast Asia; Indonesia; Malaysia;

Citation:
Bussgang, Jeffrey J., and Olivia Hull. "C16 Biosciences: Lab-Grown Palm Oil." Harvard Business School Case 820-008, October 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | October 2019
David Yin’s Vegetarian Mission
Boris Groysberg and Evan M.S. Hecht
After the establishment of his critically-acclaimed upscale vegetarian restaurant, King’s Joy, in Bejing, chef and entrepreneur David Jin must decide whether or not to expand to other locations or continue to invest in his existing location in order to fulfill his mission of promoting vegetarian cuisine.
Keywords: restaurant; restaurant industry; Creative Ability; Creative Industries; food; entrepreneurship; China; values; Entrepreneurship; Creativity; Food; Values and Beliefs; China;

Citation:
Groysberg, Boris, and Evan M.S. Hecht. "David Yin’s Vegetarian Mission." Harvard Business School Case 420-027, October 2019. View Details
Cite View Details Educators Purchase Related
Chapter | Business, Ethics and Institutions | 2019
Business, Ethics and Institutions. The Evolution of Turkish Capitalism in a Comparative Perspective
Asli M. Colpan and G. Jones
This chapter offfers a survey of the evolution of Turkish capitalism from the nineteenth century Ottoman Empire until the present day. It shows that Turkish business over the last century and a half was shaped in an institutional context similar to those in many developing countries. The country missed out on the first wave of modern industrialization during the Ottoman era, and developed in a somewhat skewed way, with minority religious and ethnic groups dominating business, in part because of policies imposed by the Western powers. As in many developing countries, business in the Ottoman Empire faced the daunting task of catching up with the developed West. Unlike most other countries, however, the elimination of entrepreneurial minority groups including Armenians and Greeks greatly complicated the task, and gave it distinct characteristics. At the center of this distinctiveness was the role of the government in the early Turkish Republic, which pursued a nationalistic and secular agenda in a Muslim country. Turkish business (in contrast to, say, that of India) grew in an insular fashion, largely unable to develop strong international competitive advantages compared to some of its South Asian and Latin American counterparts. Turkey’s business groups were, as elsewhere, a response to institutional voids and the importance of contact capabilities but even the best of them remained primarily focused on the domestic market, and mostly functioned as licensors of foreign technologies rather than as drivers of innovation. The last three decades have seen a remarkable development as long-established business groups faced a new set of challenges from the provincial towns of Anatolia, which are characterized by their religious beliefs and links to political Islam. They created their own associations and utilized institutions that have roots in traditional Islamic and Ottoman history, such as the vakif, to raise capital. Strikingly, this sector of the business community appears more resilient and responsive to the global economy than do their secular counterparts. Anatolian capitalism has thus become a source of renewal and growth for the Turkish economy, albeit one in which persistent problems of corruption and rent-seeking have appeared in new forms.
Keywords: business groups; Entrepreneurship; Ethics; Government and Politics; History; Religion; Business History; Turkey; Central Asia; Middle East;

Citation:
Colpan, Asli M., and G. Jones. "Business, Ethics and Institutions. The Evolution of Turkish Capitalism in a Comparative Perspective." Chap. 1 in Business, Ethics and Institutions: The Evolution of Turkish Capitalism in Global Perspectives, edited by Asli M. Colpan and G. Jones, 3–22. New York: Routledge, 2019. View Details
Cite View Details Purchase Related
Article | Journal of International Business Studies
Organizational Innovation in the Multinational Enterprise: Internalization Theory and Business History
Teresa da Silva Lopes, Mark Casson and G. Jones
This article engages in a methodological experiment by using historical evidence to challenge a common misperception about internalization theory. The theory has often been criticized for maintaining that it assumes a hierarchically organized MNE based on knowledge flowing from the home country. This is not an accurate description of how global firms operate in recent decades, but this article shows it has never been true historically. Using longitudinal data on individual firms from the nineteenth century onwards, it reveals evidence of how entrepreneurs and firms with multinational activity faced by market imperfections changed the design of their headquarters and their organizational structures.
Keywords: Internalization; multinational strategy; business history; entrepreneurship; organization and management theory; Globalization; Entrepreneurship; Governance; History; Organizations; Theory; Africa; Asia; Europe; Latin America; North and Central America;

Citation:
da Silva Lopes, Teresa, Mark Casson, and G. Jones. "Organizational Innovation in the Multinational Enterprise: Internalization Theory and Business History." Journal of International Business Studies 50, no. 8 (October 2019): 1338–1358. View Details
Cite View Details Find at Harvard Read Now Related
Case | HBS Case Collection | September 2019
Earth Bank of Codes: Making Nature’s Biological Assets Visible and Valuable for the Benefit of All
Tarun Khanna, Raffaella Sadun and Susie Ma
In 2019, entrepreneur Juan Carlos Castilla-Rubio was developing a project he hoped could generate and share wealth from the natural resources of the Amazon without destroying those resources. His idea, called Earth Bank of Codes (EBC), would create a library of the genomic codes of all known species that could be tapped for discovery and innovation, from new medical interventions to more efficient manufacturing processes. He proposed to use blockchain technology to make the data both accessible and trackable so that its use could be monitored. Castilla-Rubio envisioned a time when a company in the U.S. could access a biological asset from the Peruvian Amazon, develop and commercialize a product based on the asset, and have a fraction of the resulting sales land directly in the bank account of various beneficiaries, including the Peruvian government and indigenous communities. Now he was facing major decisions about how to structure EBC to achieve his goals. Should he start at the top and build partnerships with national governments and inter-governmental organizations as the cornerstone of EBC? Or would it be better to forge ahead with a few stakeholders in an entrepreneurial project?
Keywords: Decision Making; Development Economics; Entrepreneurship; Innovation and Invention; Intellectual Property; Emerging Markets; Market Design; Marketplace Matching; Science; Genetics; Natural Environment; Environmental Sustainability; Weather and Climate Change; Social Enterprise; Strategy; Strategic Planning; Technology; Ownership; Social Psychology; Trust; Society; Biotechnology Industry; South America; Amazon Basin;

Citation:
Khanna, Tarun, Raffaella Sadun, and Susie Ma. "Earth Bank of Codes: Making Nature’s Biological Assets Visible and Valuable for the Benefit of All." Harvard Business School Case 720-356, September 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | September 2019
Gun Safety in America: Three Leaders Propose Innovative Solutions
Rosabeth M. Kanter and Joseph Paul
Gun violence was a significant problem in America. Three Harvard Advanced Leadership Initiative Fellows Christy Wood, Russell Sternlicht, and Gareth Glaser each decided to do something about gun safety. They each used their professional and leadership experience to identify their own solutions to the issue. Wood created a set of principles for investments funds to pressure gun manufacturers and gun sellers within their portfolios to adopt safety standards. Sternlicht designed a membership-based lobbying and advocacy group in order to harness the power of mass movements to create positive change. And Glaser founded a smart-gun company whose product could help reduce certain types of deaths and injuries. Would any of these three innovations move beyond the historical gridlock on gun safety?
Keywords: gun violence; guns; advanced leadership; Advanced Leadership Initiative; innovation; innovation ＆ entrepreneurship; social change; social responsibility; Leadership; Change Management; Experience and Expertise; Social Entrepreneurship; Values and Beliefs; Policy; Governing Rules, Regulations, and Reforms; Leading Change; Non-Governmental Organizations; Social Issues; Innovation and Invention; Corporate Social Responsibility and Impact; United States;

Citation:
Kanter, Rosabeth M., and Joseph Paul. "Gun Safety in America: Three Leaders Propose Innovative Solutions." Harvard Business School Case 320-004, September 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | September 2019
Alicia Keys
Boris Groysberg, Annelena Lobb and Sarah Mehta
This case explores the life and career of Alicia Keys, the 15-time Grammy winning singer-songwriter and producer. Set in 2019, it covers the evolution of Keys’s 18-year musical career and additional passions, including acting, entrepreneurship, social justice activism, and collecting art with her husband, rapper and music producer Swizz Beatz. Now a mother of two young sons and with no intentions of slowing down, Keys considers what the next phase of her life and career might hold. This case would be useful for students studying the music and entertainment industry. It also holds relevance for executives approaching the peak of their career and looking to make more deliberate decisions about time management and prioritization.
Keywords: Entertainment; Music Entertainment; Television Entertainment; Entrepreneurship; Fine Arts Industry; Music Industry; United States;

Citation:
Groysberg, Boris, Annelena Lobb, and Sarah Mehta. "Alicia Keys." Harvard Business School Case 420-033, September 2019. View Details
Cite View Details Educators Related
Case | HBS Case Collection | September 2019 (Revised October 2019)
Bill Connors and The Farm, a Comcast NBCUniversal Innovation Hub (Powered by Boomtown)
Linda A. Hill and Eric Mankin
In 2017, Bill Connors, the President of Comcast’s Central Division, launched a startup accelerator in Comcast’s new Atlanta Regional headquarters. Comcast was America's largest cable and internet service provider, having built a profitable business bundling television content and delivering it via cable networks to more than 20 million households. The business was changing rapidly with the rise of streaming services, and Connors wanted to change the culture and orientation of Comcast’s central division. Connors was getting ready to meet Burunda Prince, a candidate for the position of Managing Director of the new accelerator. Is she the right person for the job? The case explores structural questions for corporate startup accelerators, such as whether Comcast should hire another company to manage the accelerator and where the accelerator should be located. It also provides a basis for discussions relating to the role that a startup accelerator can play in a large corporation. This case can be taught as a standalone case, or with its counterpart, “Burunda Prince at The Farm, a Comcast NBCUniversal Innovation Hub (Powered by Boomtown)” which would follow this one and focuses on the operational challenges of launching a corporate startup accelerator.
Keywords: innovation; entrepreneur; Startup; accelerator; outsourcing; hiring; Talent; culture; ecosystem; digital; Leadership; Innovation and Invention; Entrepreneurship; Business Startups; Diversity; Selection and Staffing; Organizational Culture; Media; Entertainment; Transformation; Atlanta;

Citation:
Hill, Linda A., and Eric Mankin. "Bill Connors and The Farm, a Comcast NBCUniversal Innovation Hub (Powered by Boomtown)." Harvard Business School Case 420-056, September 2019. (Revised October 2019.) View Details
Cite View Details Educators Related

See all faculty publications on Entrepreneurship »

Faculty & Research

Featured Works

Initiatives & Projects

Faculty

Seminars & Conferences

HBS Working Knowledge

Harvard Business Publishing