Social capital and financial capital acquisition: creating gaming ventures in Shanghai’s entrepreneurial ecosystem

Abstract

Entrepreneurs have been a driving force in the rapid development of the Chinese digital game industry. However, in previous studies, little attention has been paid to entrepreneurs’ business development and performance, especially the ways in which they obtain key resources in the process of venture creation. Because most gaming entrepreneurs in China have wrestled with fundraising difficulties in recent years, this study was conducted to examine how gaming entrepreneurs acquire financial capital from a social capital perspective. Data were collected from 33 in-depth interviews with gaming entrepreneurs who were operating ventures in Shanghai, one of China’s major game industry hubs. The data included detailed accounts of the acquisition of financial capital in relation to the local entrepreneurial ecosystem’s four capital providers: business angels, venture capitalists, incubators/accelerators, and government funding agencies. The findings showed that the gaming entrepreneurs in this study used diverse patterns of social capital access and mobilization to acquire financial capital. The findings also showed how the entrepreneurs had adjusted their social capital use in response to the worsening financial market. The findings of this study contribute to the literature on the Chinese digital game industry by articulating how gaming entrepreneurs leverage social resources to enact venture creation.

Keywords:

• financial capital
• social capital
• gaming entrepreneurship
• digital game industry
• entrepreneurial ecosystem
• Shanghai

Acknowledgments

The author would like to thank Wenhong Chen for her valuable feedback on an earlier draft of this manuscript as well as the editors and two anonymous reviewers for their constructive comments and detailed editing of this article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The research project is financially supported by the Chiang Ching-kuo Foundation for International Scholarly Exchange.

Notes on contributors

Gejun Huang

Gejun Huang is a PhD candidate in the Department of Radio-TV-Film at The University of Texas at Austin. His research focuses on the digital game industry, media entrepreneurship as well as the digital divide and inclusion. He has published articles in American Behavioral Scientists, Information, Communication & Society, and other peer-reviewed journals.