Exploring the Impact of External Investors on Resource Availability in High Potential Start-up Businesses in Ireland

Crehan, Eugene (2018) Exploring the Impact of External Investors on Resource Availability in High Potential Start-up Businesses in Ireland. Doctoral thesis, Waterford Institute of Technology.

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Abstract

This research explores the impact of external investment on resource availability in high potential start-up (HPSU) businesses in Ireland, in the context of developing internal sources of competitive advantage. Only a minority of early stage businesses exploiting some form of innovation or engaging in research and development (R&D) require external equity-based investment. This study explores how HPSUs engage with external investors to increase resource availability in their firms, thus allowing them to develop resources in pursuit of competitive advantage. A conceptual framework is developed depicting resource availability in HPSUs in the context of developing resources in pursuit of competitive advantage. The framework is underpinned by resource-based view (RBV) theory with the intent of extending RBV theory to smaller, high potential early stage businesses. The research adopts a qualitative interpretivist multiple case study method, utilising in-depth interviews with the HPSU CEOs, followed by group interviews with employees and co-founders in tandem with analysis of firm documentation. Seven HPSUs participated in this study between June and December 2017. A novel approach in this research is the focus on the perspectives of the recipients of the investments, that is the early stage businesses. The capture of these perspectives enables this study to construct a comprehensive description of HPSU activities prior to and after securing external investment. The research describes how goal setting at firm-level leads to resource needs identification and consequently to interactions with external investors to acquire resources for the HPSUs. It then discusses how HPSUs configure financial and non-financial resources in pursuit of competitive advantage for the firms. The research findings conclude that HPSUs acquire investment from a variety of sources and configure those financial and non-financial resources in a manner that affords them competitive advantage in the market. The overarching conclusion is that HPSUs are not typical early stage firms, as they are not resource poor in all categories. They can be regarded as rich in non-financial resources such as founders’ experience, technical skills, IP rights and valuable connections via founders’ networks. Limited financial resources curtail their potential. That potential is augmented through the receipt of external investment. Several practical recommendations are made for HPSUs and prospective HPSUs, for Government funded bodies supporting early stage businesses, and for investors and debt providers. This research extends the application of RBV to the entrepreneurial environment of small firms by describing the contextual environment of HPSUs and how they organise their firm resources to develop resources in pursuit of competitive advantage. A contribution to theory is achieved by extending the application of RBV to resource-rich, cash-poor, high potential, early stage businesses.

Item Type: Thesis (Doctoral)
Uncontrolled Keywords: Start-up business
Departments or Groups: *NONE OF THESE*
Divisions: School of Business > Department of Management and Organization
Depositing User: Derek Langford
Date Deposited: 26 Jun 2019 10:02
Last Modified: 26 Jun 2019 10:02
URI: http://repository.wit.ie/id/eprint/3354

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