Abstract

The context of entrepreneurs’ families is inextricably intertwined, and plays an important role in new venture creation (Aldrich and Cliff, 2003; Carter, 2010; Steier, 2007). In particular, major family events, both prospective and retrospective are perceived as beneficial or harmful, and accordingly have the potential to create situations of inner disequilibrium which afford or deplete entrepreneurs’ cognitive resources. Cognitive resources refer to the capacity of entrepreneurs to mentally process and frame situations in an opportunistic manner (Alvarez and Busenitz, 2001). Because mental processing resources are highly valued (and inherently limited), overconfident entrepreneurs attempt to save time and effort in making judgments by using heuristics (Bernado and Welch, 2001; Busenitz and Barney, 1997; Cooper et al., 1988), increasing the likelihood that their ventures will fail (Hayward et al., 2006). In this perspective, this article investigates how major family transitions—birth, death, marriage, divorce, illness, and financial status affect the success of new ventures.

Share

COinS