Type of Entrepreneur and Growth of New Ventures: Testing and Validation of A Typology of Software Entrepreneurs in India

Abstract

We propose in this paper that the weak link between entrepreneurial characteristics and New Venture Performance (NVP) in entrepreneurship research is partly due to inconsistencies in operationalization of the entrepreneur as an empirical construct. Strong theoretical linkages suggest that a combination of skills and motivations of the entrepreneur may yield a typology that is robust and has high explanatory power. Operationalization of the entrepreneur as a combination of skills and motivations has not been attempted in earlier studies. A study of 107 founders of new venture in the software services industry in India resulted in the identification of a typology that is found to be stable and valid, with strong links to previous research. The 5-cluster solution was demonstrated to have high internal and external validity. Moreover, the type of entrepreneur was also found to be significantly associated with employment creation and growth in employment size. It is suggested that the skill-motivation-set may be used as a more robust operationalization of the entrepreneur as an empirical construct. The identification of a typology of entrepreneurs that is strongly correlated to performance of the new venture can form a basis for the evaluation of the entrepreneurial human capital of the venture.