Entrepreneurship has been among the key driving forces of the emergence of a dynamic private sector during the recent decades in Vietnam. This paper investigates how entrepreneurial family firms can achieve and maintain success by benefiting from various sources of competitive advantage. Since Vietnam is characterized by a community culture favoring mutual trust and reciprocity among family / network members, it is obvious that family firms among the population of firms in the private sector take up a critical contribution to both their local and national economy. In particular, the paper addresses two questions “how capital constraints affect the performance of family firms” and “how entrepreneurs’ human and social capital interact with capital constraints to leverage entrepreneurial income”. Our focus is to investigate the effect of capital constraints on the subsequent performance of family businesses in Vietnam, taking into account the possibility that human capital and social capital, by boosting financial capital and easing access to credit, might also have indirect effects on family firms’ ability to create and sustain a competitive advantage.