Abstract

Early-stage ventures face a wide range of challenges and liabilities, making public policy intervention particularly valuable. Significant scholarly attention has been devoted to the nature, functioning and impact of public support programs. However, a vital question that remains unanswered in extant literature is whether such programs are well designed, and can help entrepreneurs to overcome their specific challenges and liabilities. Particularly, we lack insights into entrepreneurs’ need for external support services and what factors cause variation in their needs. Consequently, our study sheds light on the drivers of entrepreneurs’ need for business support, thereby drawing on regulatory focus theory and social capital theory. Regulatory focus theory delineates how people engage in self-regulation, the process of bringing oneself into alignment with one’s standards and goals. We hypothesize that promotion-focused entrepreneurs are better able to recognize alternative solutions to problems themselves, and thus experience lower levels of need for business support than prevention-focused individuals. Further, we introduce network density as an important moderator. Specifically, we expect that high network density will increase the need for business support among promotion-focused entrepreneurs while decreasing the need for business support among prevention-focused entrepreneurs.

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