Abstract

The enthusiasm about entrepreneurship is often associated with the ‘big money’ model of entrepreneurship (Bhidé, 1992). This VC-backed model of entrepreneurship, however, is in stark contrast to the traditional low-budget start-ups, which form the overwhelming majority (Pierrakis, 2010). Entrepreneurship research shows a similar bias towards capital intensive sectors (Macpherson and Holt, 2006). As a result, there is very limited research about the founding and subsequent growth of companies that started with little or no access to external finance (Harrison et al, 2004). Previous studies have mainly focused on constraints in the supply of finance, whereas how entrepreneurs create value by exploiting opportunities under financial constraints has been given much less attention (Winborg and Landstrom, 2001). To address this shortcoming in the literature, our study investigates how resource-constrained entrepreneurial firms handle the resource management process under different environmental contingencies.

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