Overcoming Resource Constraints: The Role of Creative Resourcing and Equity Crowdfunding in Financing Entrepreneurial Ventures

This dissertation extends current knowledge about how entrepreneurs overcome resource constraints, without relying extensively on capital from “traditional” equity investors. In particular, I build on research on creative resourcing (i.e., bricolage, bootstrapping) and on literature on equity crowdfunding, to investigate (1) how do bricolage and bootstrapping affect firm-level outcomes, (2) How do top management team (TMT) attributes influence the reliance of firms on bricolage and bootstrapping, and (3) How do crowd investors (i.e. investors in equity crowdfunding) identify high-quality opportunities to invest in.

The findings from the first two studies show that bootstrapping and bricolage are prevalent resourcing behaviors in small and medium-sized enterprises, and that these behaviors differentially affect firm outcomes. More specifically, bricolage enables firms to balance exploration and exploitation, and positively effects firm performance, whereas bootstrapping has a negative effect on firm performance. I also found supporting evidence that the socio-cognitive attributes of the TMTs fundamentally shape the willingness and ability of these teams to engage in bricolage and bootstrapping. The findings from the third study in my dissertation support the contention that crowd investors use heuristics (i.e. mental shortcuts aimed at reducing the effort required for a task), when evaluating investment opportunities. Most importantly, several heuristics, such as the disconfirmation and selectivity heuristics, help investors identify the more promising investment opportunities. These findings have important practical implications for investors, but also for entrepreneurs that can improve the way they interact with their (potential) investors.