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The author shows that advisory boards in technology-based startups have seven different roles and functions: control, advice, networking, signalling, capital provision, co-management, coordination. It is shown that venture capital investors try to influence the importance of these roles in favour of control, coordination and co-management. Contrary to this, the satisfaction of founders as well as advisory board members increases with a higher importance of advice, networking and signalling. This analysis provides both qualitative and quantitative empirical data on the usage of those boards in practice.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract
The underlying problem of this study is that many young and innovative companies fail and become bankrupt within their first years. This has been empirically proven by many different research studies on entrepreneurship such as the Global Entrepreneurship Monitor (GEM) Germany (Sternberg/Vorderwülbecke/Brixy 2014) or the ‘KfW-Gründungsmonitor 2014’ (Metzger 2014). It is clear that many young companies fail within the first few years after they are founded. According to the GEM the fear of failing in Germany is much higher than in other developed countries, significantly harming entrepreneurial activities.
Eric Weber

Chapter 2. Basic concepts and terms

Abstract
One important factor of the research questions is the term ‘startup’, which may require some further explanations due to the lack of a common understanding. The term itself is frequently used in the research field of entrepreneurship, which was shaped by Schumpeters basic and widespread definition: “The function of entrepreneurs is to reform or revolutionize the patterns of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on.” (Schumpeter 1942, p. 13). In his understanding entrepreneurs introduce innovation to markets.
Eric Weber

Chapter 3. Contributions of research on governing boards

Abstract
Although the existing literature was intensely scanned through different databases, only few publications on ABs in the context of startups and entrepreneurial firms could be identified. In addition, there are a couple of publications focusing on ABs with a concentration on family businesses or large firms. Due to the special conditions of startups, in particular technology-based startups, there might be significant differences and thus these studies should be considered more suspiciously. The following subchapters will provide an overview of academic literature on ABs in startups, later on in other types of companies and lastly more practice-oriented literature on ABs.
Eric Weber

Chapter 4. Exploring the role of advisory boards in technology-based startups using qualitative methods

Abstract
Due to the underdeveloped research on ABs in startups, the identification of provable hypotheses and the setup of appropriate research methods or even a model based on previous literature would be based on shaky ground. Also the absence of legal specifications allows an adaption of ABs according to individual requirements in each case, causing additional complexity of processes, functions or structures. Using determined and very specific research designs to investigate such complex objects of research could neglect unforeseen aspects and phenomena as well as it would steer in a certain direction of anticipated findings (Corbin/Strass 2008).
Eric Weber

Chapter 5. Exploring the role of advisory boards in technology-based startups using quantitative methods

Abstract
Since the results presented in the previous chapter were based on an exploratory qualitative research approach, it is valuable to obliterate some of the aforementioned disadvantages of this methodology. Especially the objectivity of the outcomes is rather low due to the small number of cases that can be included in qualitative research. As described it is necessary to embrace a lot more cases to reach a higher generalizability.
Eric Weber

Chapter 6. Summary and implications

Abstract
Compared to established companies startups have to cope with several disadvantages. First of all, they have higher monetary and non-monetary transaction costs due to higher uncertainty for their exchange partners. Secondly, they face liabilities of newness, since internal and external social relations have to be established. Thirdly, liabilities of adolescence occur, when the initial resource inputs are exhausted, the intensive monitoring of the early phases ends and typically failure happens. Fourthly, many young firms are a victim of liabilities of smallness because a lack of resources causes a higher sensitivity to crisis and a lower market power.
Eric Weber

Backmatter

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