Portfolio Entrepreneurship as a Mixed Gamble: A Winning Bet for Family Entrepreneurs in SMEs

Abstract

We conceptualize portfolio entrepreneurship (PE) decisions as a “mixed gamble” in which family entrepreneurs weigh potential gain and loss outcomes and analyze the unique socioemotional wealth tradeoffs implied by this strategic decision. Our theory suggests that, in small and medium enterprises contexts, family entrepreneurs will be more likely to engage in PE than non‐family entrepreneurs. In addition, our framework explores the amplifying effect of age, gender and ethnic origin on the likelihood to take the PE gamble.

Notes

9. In this paper, we use the European Commission's (2005) definition, which relies on the staff headcount for determining whether an enterprise can be considered as an SME (i.e., an enterprise is an SME if it employs between 1 and 250 people).

10. For example, Sieger et al.'s (2011) in‐depth case studies provide accounts of PE across Europe and Latin America, with family firm owning between 6 and 13 concurrent businesses. In the United States, Zellweger et al. (2012) study of 118 family firm owners and members finds preliminary indication of entrepreneurial activity of these owners beyond their core firm. More than 89 percent of the family owners in their sample controlled more than one firm, with an average of 6.1 firms per owner.

11. Chi‐squared statistics were used to test whether personal characteristics (such as age and gender) differed between entrepreneurs that were reinterviewed and those who did not respond to our survey, yielding nonsignificant differences.

Additional information

Notes on contributors

Cristina Cruz

Cristina Cruz is full professor of Entrepreneurial Management at the IE Business School.

Rachida Justo

Rachida Justo is associate professor of Entrepreneurial Management at the IE Business School.