The role of behavioural competences in predicting entrepreneurial funding resource orchestration

Figures & data

Figure 5. Advisors versus non-advisors.

Table 1. Panel profile of entrepreneurs

Turnover (£000s)				Employees (No.)		Year incorporated
<£100	100–500	500–1000	+1,000	<10	10+	1995–2000	2000–2005	2005–2011
27	20	6	7	46	14	3	14	43

Table 2. Research propositions

Trait competency and proposition	References
P1 Working with Others: Being able to Work with Others provides opportunities to access finance	Social Network Theory; Granovetter (1973)
P2 Communicating, Meeting and Presenting: Being a good communicator can facilitate access to finance	Baum and Locke (2004); Collins and Porras (1994); Rauch and Frese (2007)
P3 Innovating and Creating: Innovating and creative skills open up more opportunities for access to finance	Rauch, van Doorn, and Hulsink (2014); Schumpeter (1934)
P4 Problem-Solving: An entrepreneur who can problem solve is better able to access finance.	Sarasvathy (2001); Dew and Wiltbank (2008); Rauch and Frese (2007); Sarasvathy (2004)
P5 Planning and Organising: Planning and organising are key to successful access to finance for the firm	(Black (1998); Shapero and Sokol (1982); Ciavarella (2004); Theory of Planned Behaviour Ajzen (1991)
P6 Driving for Results: An entrepreneur who is driven can access more finance opportunities	Delmar and Wiklund (2008); Locke and Latham (1990)
P7 Working with Customers: Working with customers increases opportunities to access finance	Social Network Theory, Resource Development Theory Granovetter (1973)
P8 Leading Others: Competency in leadership increases access to finance	Collins and Porras (1994); Rauch and Frese (2007)
P9 Coping with Pressure: Entrepreneurs who are better able to cope with pressure increase access to finance	Sarasvathy (2004); Dew and Wiltbank (2008); Rauch and Frese (2007)

Figure 1. Mean BCSs: 60 entrepreneurs (scale 0–10).

Figure 2. Competences by cluster.

Table 3. Applications versus Clusters

Year 1 Finance Applications	Capables	%	Collaborators	%	Low Competencers	%
Total	28		15		17
Applied and Successful	11	39%	4	27%	2	12%
Applied and Unsuccessful	1	4%	1	7%	4	24%
Didn’t Apply	16	57%	10	66%	11	64%
Year 2 Finance Applications	Capables	%	Collaborators	%	Low Competencers	%
Total	26		15		15
Applied and Successful	13	50%	7	47%	4	27%
Applied and Unsuccessful	1	4%	2	13%	6	40%
Didn’t Apply	12	46%	6	40%	5	33%
Year 3 Finance Applications	Capables	%	Collaborators	%	Low Competencers	%
Total	26		15		15
Applied and Successful	13	50%	4	27%	3	20%
Applied and Unsuccessful	1	4%	1	7%	3	20%
Didn’t Apply	12	46%	10	66%	9	60%

Figure 3. Successful versus Unsuccessful versus Didn’t Apply.

Figure 4. Competences versus funding type.

Table 4. Funding type by cluster

Funding type by cluster	Capables	Collaborators	Low Competencers
Self-Funded	31%	49%	34%
Equity Funded	31%	27%	34%
Secured Funding	38%	24%	32%

Table 5. Funding outcomes by funding type

Funding outcome by funding type	Self-Funded	Equity-Funded	Secured Funding
Applied and Successful	10%	72%	30%
Applied and Unsuccessful	13%	9%	13%
Didn’t Apply	78%	19%	57%

Table 6. Advisors versus clusters

Clusters versus Use of Advsiors	Capables	Collaborators	Low Competencers
Use Advisors Yes	77%	60%	25%
Use Advisors No	23%	40%	75%

Table 7. Indicates relationship between the use of advisors and applications outcomes

Use of Advisors	Yes	No
Applied and Successful	47%	19%
Applied and Unsuccessful	2%	24%
Didn’t Apply	52%	57%

Table 8. Year 1 coded interview density

	Capables	Collaborators	Low Competencers	All Cases
Working with Others	23%	31%	12%	23%
Planning and Organising	24%	13%	10%	19%
Communicating, Meeting, Presenting	12%	11%	6%	11%
Innovating and Creating	11%	13%	8%	11%
Driving for Results	6%	9%	4%	7%
Working with Customers	5%	4%	5%	5%
Problem-Solving	2%	2%	0%	2%
Coping with Pressure	3%	0%	0%	2%
Leading Others	2%	1%	0%	1%
Behavioural Difficulty	11%	15%	55%	19%
Total Code	100%	100%	100%	100%

Table 9. Year 2 coded interview density

	Capables	Collaborators	Low Competencers	Total nodes
Working with Others	24%	13%	3%	17%
Communicating, Meeting, Presenting	12%	20%	8%	14%
Innovating and Creating	11%	18%	4%	12%
Problem-Solving	13%	10%	6%	11%
Driving for Results	8%	5%	0%	6%
Planning and Organising	5%	5%	1%	4%
Working with Customers	4%	6%	2%	4%
Coping with Pressure	1%	0%	0%	0%
Leading Others	0%	1%	0%	0%
Behavioural Difficulty	23%	22%	75%	31%
Total code	100%	100%	100%	100%

Table 10. Year 3 coded interview density

	Capables	Collaborators	Low Competencers	All nodes
Working with Others	21%	24%	12%	21%
Innovating and Creating	15%	23%	12%	17%
Driving for Results	12%	15%	6%	13%
Communicating, Meeting, Presenting	9%	14%	7%	10%
Planning and Organising	11%	0%	0%	8%
Problem-Solving	4%	8%	2%	5%
Working with Customers	1%	3%	0%	1%
Coping with Pressure	2%	0%	0%	1%
Leading Others	0%	0%	0%	0%
Behavioural Difficulty	25%	13%	61%	25%
Total code	100%	100%	100%	100%

Appendix 2. Theme and coding summary

Theme and code	Description	Sources	References
Communicating, Meeting, Presenting		23	36
Approaching International Investors	Going outside the UK to see equity investors	1	1
Approaching Investors	Evidence of entrepreneurs approaching individuals or organisations to make private equity investments	18	27
Entering Competitions	Entering competitions for awards, recognition or prizes	0	0
Meeting Bankers, Brokers and Other Lenders	Regular structured informed communication	7	8
Coping with Pressure		1	2
Personal Reflections	Putting stress into context	1	2
Driving for Results		18	34
Consider acquisitions and mergers	Entrepreneur considering mergers and acquisitions as a way of facilitating further funds into the business.	0	0
Identifying Growth and Opportunity	Identification of growth opportunity is key at the outset of the funding process	16	27
Persistence and Challenging	Evidence of the resilience of the entrepreneurs and an ability to cope with setbacks and adversity.	5	7
Innovating and Creating		25	65
Changing Bank	Looking to switch lender as a way of potentially increasing funding.	0	0
Grant Applications	Pursuing grants	13	19
Internal Funding	Reinvesting profits including bootstrapping and other internally sourced funding	8	10
Peer-to-Peer Lenders	Looking to use new peer-to-peer funding models	9	16
SME Educational Programme	Joined a scheme to open funding sources	12	20
Leading Others		0	0
Planning and Organising		6	15
Cash Management	This includes the preparation of Management Accounts and Cash Flow Forecasts	5	7
Using Flexible Staff Management	Planning a flexible approach to labour management to help fund the business.	4	8
Problem-Solving		12	20
Developing a business model to attract funding	Explaining how the business model is developing and therefore makes it possible to raise funds	6	8
Using Match Funding	Evidence that the entrepreneur is willing to put match his own funds with external sources	9	12
Working with Customers		5	5
Creating Relationships	Customers as potential investors	1	1
Flexible Payment Terms	Getting flexible payment terms so it eves out cash flow and makes easier planning for investments	4	4
Working with Others		22	60
Advisors, Mentors, Non Execs	Seeking and using third party assistance in the context of finding finance	14	29
Friends and family	Looking to family or friends as a source of finance	1	1
JV’s	Looking for a partner as a potential source of investment	12	23
Suppliers	Seeking funding through arrangements with suppliers	5	7
Behavioural Difficulty		26	63
Bad Hiring Decisions	Funding hindered by poor hiring decision	0	0
Bad Planning	Where poor planning decisions have hindered the funding application process	3	3
Business Partner Problems	Where problems cause problems in the funding process	2	2
Decision to consolidate	Evidence of more cautious behaviour	7	7
Difficulty with Advisors and Mentors	Problems taking advice	0	0
Difficulty with new funding sources	Finding problems with more innovative forms of funding	5	7
Difficulty with SME Educational schemes	Problem with application process’	0	0
Doubts over personal skills		1	2
Given up	Throwing in the towel type behaviour	0	0
Just focus on the family	Evidence where a more family orientated focus prevents funding	0	0
Keeping Control	An emphasis on needing to keep control and as a result this closes funding streams	7	8
Problems with factoring	See difficulties with debt factoring	0	0
Problems with Security	Difficulties with arranging security	8	10
Problems with VC Process	Just finding it difficult with VC Due Diligence process	3	3
Signs of Frustration	Just losing ability to rationalise process	10	13
Struggling with the Bank	Difficulties with lenders	4	6
Uncertainty	Not being able to plan effectively due to uncertainty	2	2

Granovetter, M. (1973). ‘The strength or weak ties. American Journal of Sociology, 78, 1360–1380. doi:10.1086/225469

 Web of Science ®Google Scholar

Baum, J. R., & Locke, E. A. (2004). The relationship of entrepreneurial traits, skill, and motivation to subsequent venture growth. Journal of Applied Psychology, 89(4), 587–598. doi:10.1037/0021-9010.89.4.587

 PubMed Web of Science ®Google Scholar

Collins, J., & Porras, J. (1994). Built to last: Successful habits of visionary companies. Harper: New York.

 Google Scholar

Rauch, A., & Frese, M. (2007). ‘Let’s put the person back into entrepreneurship research: A meta-analysis on the relationship between business owners’ personality traits, business creation, and success. European Journal of Work & Organizational Psychology, 16(4), 353–385. doi:10.1080/13594320701595438

 Web of Science ®Google Scholar

Rauch, R., van Doorn, R., & Hulsink, W. (2014). A qualitative approach to evidence-based entrepreneurship: Theoretical considerations and an example involving business clusters. Entrepreneurial Theory and Practice, 38, 333–368. doi:10.1111/etap.2014.38.issue-2

 Web of Science ®Google Scholar

Schumpeter, J. (1934). The theory of economic development. Cambridge, Mass.: Harvard University Press.

 Google Scholar

Sarasvathy, S. D. (2001). Causation and effectuation: Toward a theoretical shift from economic inevitability to entrepreneurial contingency Academy of management. The Academy of Management Review, 26(2), 243–263. doi:10.5465/amr.2001.4378020

 Web of Science ®Google Scholar

Dew, R. S., & Wiltbank. (2008). Outlines of a behavioral theory of the entrepreneurial firm. Journal of Economic Behavior & Organization, 66(1). doi:10.1016/j.jebo.2006.10.008

 Web of Science ®Google Scholar

Sarasvathy, S. D. (2004). Making it happen: Beyond theories of the firm to theories of firm. Wiley.

 Google Scholar

Black, J. (1998). Entrepreneur or entrepreneurs? Justification for a range of definitions. Journal of Business and Entrepreneurship, 10, 45–65.

 Google Scholar

Shapero, A., & Sokol, L. (1982). The social dimension of entrepreneurship. The Encyclopedia of Entrepreneurship, 72–90.

 Google Scholar

Ciavarella, M. (2004). The Big Five and venture survival: Is there a linkage? Journal of Business Venturing, 19(4), 465. doi:10.1016/j.jbusvent.2003.03.001

 Web of Science ®Google Scholar

Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior & Human Decision Processes, 50(2), 179. doi:10.1016/0749-5978(91)90020-T

 Web of Science ®Google Scholar

Delmar, F., & Wiklund, J. (2008). ‘The effect of small business managers’ growth motivation on firm growth: A longitudinal study. Entrepreneurship: Theory & Practice, 32(3), 437–457.

 Web of Science ®Google Scholar

Locke, E., & Latham, G. (1990). A theory of goal setting and task performance. Englewood Cliffs, NY: Prentice Hall.

 Google Scholar