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
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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
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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
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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
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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
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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
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Recent Publications

Case | HBS Case Collection | February 2019
Extend Fertility: Conceiving the Market for Egg Preservation (A)
Debora L. Spar and Olivia Hull
In April 2003, entrepreneur and MBA student Christy Jones was planning a new venture to help women preserve their fertility. Her company, Extend Fertility, would commercialize a technique known as egg freezing, in which a woman’s eggs were extracted and stored at low temperatures until she was ready to become a mother. To date, the emerging technology had mostly been used to preserve the fertility of cancer patients whose treatment course could damage their eggs. Jones’s business would target a massively broader population: healthy women wishing to postpone motherhood. Before Jones could launch Extend Fertility, she needed to answer two pressing questions. What, exactly, would an egg-freezing service be selling? And to whom?
Keywords: Assisted reproduction; gender; strategy; entrepreneur; health and wellness; fertility; infertility; Women's health; Creating markets; egg freezing; fertility clinic; Strategy; Demographics; Entrepreneurship; Health Care and Treatment; Innovation and Invention; Marketing; Science; Technology; Innovation Strategy; Technological Innovation; Commercialization; Science-Based Business; Marketing Strategy; Business Plan; Product Marketing; Product Launch; Product Positioning; Mission and Purpose; Personal Development and Career; Social Issues; Integration; Health; Ethics; Health Industry; United States;

Citation:
Spar, Debora L., and Olivia Hull. "Extend Fertility: Conceiving the Market for Egg Preservation (A)." Harvard Business School Case 719-019, February 2019. View Details
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Case | HBS Case Collection | February 2019
Schneider Electric: Opening Up to External Innovation
Antonio Davila
Schneider Electric competes in tough but stable markets around energy management, automation, and control of infrastructures ranging from homes to production plants. New technologies and new approaches to serving markets are challenging the status quo. To take advantage of these changes, the company has been experimenting with different organizational structures to take advantage of these radical innovations. The case describes the challenges facing the company as well as the latest iteration of structures and systems. In particular, the company has put together “Innovation at the Edge,” which includes tools ranging from corporate venture capital to corporate accelerator. Managers at Schneider Electric have to evaluate whether these tools are enough to fulfill the needs of the company, how to fully take advantage of them, and how to further adapt them.
Keywords: Corporate Venture Capital; accelerator; Corporate Entrepreneurship; Collaborative Innovation and Invention; Disruptive Innovation; Innovation and Management; Innovation Strategy; Technological Innovation; Organizational Design; Energy Industry; Manufacturing Industry; France; United States;

Citation:
Davila, Antonio. "Schneider Electric: Opening Up to External Innovation." Harvard Business School Case 119-061, February 2019. View Details
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Case | HBS Case Collection | January 2019
AIME High: A Social Entrepreneur's Moon Shot
Christopher A. Bartlett
Describes the entrepreneurial leadership of Jack Manning Bancroft (JMB), a young Australian Indigenous university student who created the Australian Indigenous Mentoring Experience (AIME), a nonprofit organization he formed to respond to the problem of Indigenous high school students completing high school at less than half the rate of non- Indigenous students. The case traces the strategic, organizational and cultural challenges JMB faced in building an organization that eventually offered mentoring partnerships to 8000 Indigenous students in 350 high schools throughout Australia. Furthermore, the AIME students were completing school and going on to university at the same rate as nonindigenous students. The case concludes as JMB contemplates taking his successful, sophisticated model to the United States.
Keywords: entrepreneurship; mission; organization culture; non-profit; NGO; Social Entrepreneurship; Leadership; Global Strategy; Mission and Purpose; Secondary Education; Organizational Culture; Education Industry; Service Industry; Australia; United States;

Citation:
Bartlett, Christopher A. "AIME High: A Social Entrepreneur's Moon Shot." Harvard Business School Case 919-411, January 2019. View Details
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Working Paper | HBS Working Paper Series | 2019
Immigrant Networking and Collaboration: Survey Evidence from CIC
Sari Pekkala Kerr and William R. Kerr
Networking and the giving and receiving of advice outside of one’s own firm are important features of entrepreneurship and innovation. We study how immigrants and natives utilize the potential networking opportunities provided by CIC, formerly known as the Cambridge Innovation Center. CIC is widely considered the center of the Boston entrepreneurial ecosystem. We surveyed 1,334 people working at CIC in three locations spread across the Boston area and CIC’s first expansion facility in St. Louis, Missouri. Survey responses show that immigrants value networking capabilities in CIC more than natives, and the networks developed by immigrants at CIC tend to be larger. Immigrants report substantially greater rates of giving and receiving advice than natives for six surveyed factors: business operations, venture financing, technology, suppliers, people to recruit, and customers. The structure and composition of CIC floors has only a modest influence on these immigrant versus native differences.
Keywords: Immigrants; Networking; advice; entrepreneurs; inventors; start-up employees; venturing; co-working; agglomeration; Immigration; Entrepreneurship; Networks; Innovation and Invention; Social and Collaborative Networks;

Citation:
Kerr, Sari Pekkala, and William R. Kerr. "Immigrant Networking and Collaboration: Survey Evidence from CIC." Harvard Business School Working Paper, No. 19-078, January 2019. View Details
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Working Paper | HBS Working Paper Series | 2019
Does Public Ownership and Accountability Increase Diversity? Evidence from IPOs
Rembrand Koning and John-Paul Ferguson
Does public ownership improve employment diversity? Organizational researchers theorize that increased transparency to regulators and the public should lead firms to conform to legal and social norms; but also that social closure and decoupling should preserve the status quo. Empirical research has been difficult because we lack data on comparable private firms and because firms likely self-select into going public. We construct a new, nationally representative dataset that links firms' filings for initial public offerings to longitudinal data on employment composition from the Equal Employment Opportunity Commission. We construct a set of comparable firms by looking at companies that filed and then withdrew a plan for an IPO. To account for selection bias in withdrawal and IPO success, we instrument the transition to public ownership using market returns in the book-building phase of the firms' IPO attempts. We find no evidence that moving from private to public ownership increases the representation of women or nonwhite workers or managers. We discuss the implications of this finding for our ability to generalize findings in organizational research.
Keywords: IPO; Initial Public Offering; Employees; Diversity; Gender; Race; Entrepreneurship; United States;

Citation:
Koning, Rembrand, and John-Paul Ferguson. "Does Public Ownership and Accountability Increase Diversity? Evidence from IPOs." Harvard Business School Working Paper, No. 19-071, January 2019. View Details
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Case | HBS Case Collection | January 2019
Glossier: Co-Creating a Cult Brand with a Digital Community
Jill Avery
Glossier’s proclaimed strategy was “born from content, fueled by community”. The digital-first, direct-to-consumer beauty brand had experienced rapid growth, with sales up 600% in 2017 and a customer portfolio that grew by threefold. But, its founder, Emily Weiss, was not complacent. Instead, she dreamed of creating the world’s first socially-driven brand that inserted its community into the buying experience so that the company was merchandising people, their opinions, and their content, just as much as they were merchandising products. As her team debates marketing strategies for 2018, they recognize the opportunities and challenges associated with managing Glossier’s rapidly scaling brand community. While the community’s support had emerged organically in the past, the team was now debating whether the company’s next phase of growth would need to be fueled by a greater emphasis on paid peer-to-peer sales representatives, professional influencer marketing, paid media, and a physical market presence.
Keywords: Brands; brand management; brand communication; retailing; e-commerce; DTC; influencer; digital marketing; social media; Startup; internet marketing; big data; crowdsourcing; Marketing; Marketing Channels; Marketing Communications; Brands and Branding; Marketing Strategy; Entrepreneurship; Venture Capital; Consumer Behavior; Distribution; Growth and Development Strategy; Consumer Products Industry; Beauty and Cosmetics Industry; Retail Industry; United States; North America;

Citation:
Avery, Jill. "Glossier: Co-Creating a Cult Brand with a Digital Community." Harvard Business School Case 519-022, January 2019. View Details
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Article | Academy of Management Annals | 2019
Turning Lead into Gold: How Do Entrepreneurs Mobilize Resources to Exploit Opportunities?
David R. Clough, Tommy Pan Fang, Balagopal Vissa and Andy Wu
The mobilization of resources is a central and defining feature of entrepreneurship. As the body of empirical research on entrepreneurial resource mobilization has grown, the literature has become increasingly fragmented. We review the literature on entrepreneurs’ mobilization of resources, spanning human, social, financial, and other forms of capital. We identify five critical issues that hold back progress in resource mobilization research. We then propose a path ahead for future research guided by two overarching goals. First, we advocate for a process perspective, focusing attention on how an individual actor’s disposition and situation shape her responses, how these responses interact with those of other actors, and how these individual and collective responses unfold over time to generate outcomes. Second, we call for stronger unification of theory within the entrepreneurial resource mobilization literature and across contiguous conversations in strategy and organization theory. Theoretical consilience will enable the accumulation of empirical research into a cohesive body of knowledge on entrepreneurial resource mobilization.
Keywords: resource mobilization; Entrepreneurship; Organizations; Theory; Research; Strategy; Opportunities;

Citation:
Clough, David R., Tommy Pan Fang, Balagopal Vissa, and Andy Wu. "Turning Lead into Gold: How Do Entrepreneurs Mobilize Resources to Exploit Opportunities?" Academy of Management Annals 13, no. 1 (2019): 240–271. View Details
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Article | Enterprise & Society
Oral History and the Business History of Emerging Markets
G. Jones and R. Comunale
This article highlights the benefits that rigorous use of oral history can offer to research on the contemporary business history of emerging markets. Oral history can help fill some of the major information voids arising from the absence of a strong tradition of creating and making accessible corporate archives in most countries in Africa, Asia, and Latin America. It also permits a level of nuance that is hard to obtain even if written archives are accessible. Oral histories provide insights into why events did not occur as well as why companies have chosen certain industries over others. Oral history can also shed light on hypersensitive topics, such corruption, which are rarely formally documented.
Keywords: oral history; corruption; Business History; Emerging Markets; Entrepreneurship; Globalization; Business and Government Relations; Government and Politics; Asia; Africa; Latin America;

Citation:
Jones, G., and R. Comunale. "Oral History and the Business History of Emerging Markets." Enterprise & Society 20, no. 1 (March 2019): 19–32. View Details
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Case | HBS Case Collection | December 2018 (Revised December 2018)
Associação Saúde Criança: Trying to Break the Cycle of Poverty and Illness at Scale
Julie Battilana, Marissa Kimsey, Priscilla Zogbi and Johanna Mair
Dr. Vera Cordeiro founded the NGO Associação Saúde Criança in 1991 to try to help poor families break the cycle of poverty and illness in Brazil. She and her team of employees and volunteers developed a holistic methodology to address the multidimensional sources of poverty based on the pillars of health, housing, citizenship, income, and education. After introducing the seeds of this approach, the case examines the evolution of the organization’s attempts to grow its social impact in Brazil and beyond—including a loose network of sister organizations, social franchising, licensing agreements, and government adoption.
Keywords: social innovation; NGO; scaling; health; Social Enterprise; Social Entrepreneurship; Non-Governmental Organizations; Health Care and Treatment; Poverty; Health Industry; South America; Brazil;

Citation:
Battilana, Julie, Marissa Kimsey, Priscilla Zogbi, and Johanna Mair. "Associação Saúde Criança: Trying to Break the Cycle of Poverty and Illness at Scale." Harvard Business School Case 419-048, December 2018. (Revised December 2018.) View Details
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Case | HBS Case Collection | December 2018
R/GA: Corporate Venture Studio vs. Accelerator
Andy Wu, Grant Son and Aastha Thakar
New approach to accelerating the development of innovation through corporate venturing by creating partnerships between startup venture and established corporations through the launch of the Global Sports Venture Studios created by R/GA Ventures and the Los Angeles Dodgers.
Keywords: entrepreneurship; start-ups; entrepreneurial finance; Corporate Venture Capital; incubators; accelerators; Startup financing; innovation; partnerships; Ecosystems; Entrepreneurship; Business Startups; Finance; Venture Capital; Partners and Partnerships; Innovation and Invention; Sports Industry; Technology Industry; Entertainment and Recreation Industry; United States; New York (city, NY); Los Angeles;

Citation:
Wu, Andy, Grant Son, and Aastha Thakar. "R/GA: Corporate Venture Studio vs. Accelerator." Harvard Business School Case 719-414, December 2018. View Details
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