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Market-Based Solutions to Vital Economic Issues

Entrepreneurship

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Please join us for an exclusive virtual conversation with North Carolina Secretary of Commerce Machelle Baker Sanders. This discussion is part of the Dean’s Speaker Series, hosted by Kenan-Flagler Business School Dean Doug Shackelford.

Given the surge of COVID-19 cases across the country and for the safety of all, we have decided to cancel in-person attendance and make the 2022 Frontiers of Entrepreneurship Conference available to all virtually. 

From exploring the concept of shareholder capitalism to welcoming world-class speakers, Kenan Institute Executive Director Greg Brown shares some exciting things to look forward to in 2022.

Research and practice suggest that co-founded ventures outperform solo-founded ventures on average. Yet, little work has explored the conditions under which solo founding might be possible or even preferable to co-founding. Combining an inductive case-oriented analysis with a Qualitative Comparative Analysis of 70 new entrepreneurial ventures, we examine why and how solo founders can be as successful as their peers in co-founded ventures. We find that successful solo founders strategically use a set of co-creators rather than co-founders to overcome liabilities, retain control, and mobilize resources in unique and unexpected ways. A primary contribution of this paper is an emergent configurational theory of entrepreneurial organizing. Overall, we reveal the broader significance and theoretical importance of adopting a configurational lens for both practitioners and scholars of entrepreneurship.

Firms’ use of SPACs to go public has increased dramatically, leading to market and regulatory debate about their use of projections. Examining SPAC mergers from 2004 through 2021, we find that 80% of firms provide projections for four years ahead on average, with approximately one-quarter of recent projections extending more than five years. For the sample of SPAC mergers with observable post-merger revenue, we find that only 35% of firms meet or beat their projections. This proportion declines for forecasts that are longer horizon, and non-serial SPAC sponsors miss forecasts by greater percentages. When we compare SPAC projected revenue growth to benchmark samples of IPO firms and matched firms, the SPAC projections are approximately 3 times larger on average than benchmark firms’ actual revenue growth, with even greater differences for long-term projections. After the merger, firms reduce their use of projections, providing them at statistically similar rates as benchmark firms. Overall, the evidence supports concerns that the SPAC merger includes highly optimistic projections.

North Carolina’s small businesses provide economic mobility and crucial services in local communities that foster innovation and drive economic growth — a vital role that has been largely affected by COVID-19. In a recent UNC School of Government Carolina Across 100 blog post, Kenan Institute Executive Director Greg Brown sheds light on the impact – and a potential benefit – the pandemic has had on small businesses across the state.

Stock prices reflect firm performance and aggregate investor information about investment opportunities. We show that these dual roles are in tension: when prices are more informative about future investment, they are less effective at incentivizing managerial effort. Overall firm value need not increase with price informativeness; both decreasing transparency and allowing for ex-post inefficient investment can increase firm value. We show that standard empirical measures of price efficiency are incomplete and derive testable predictions for the price-sensitivity and composition of managerial compensation.

Firms’ use of SPACs to go public has increased dramatically, leading to market and regulatory debate about their use of projections. Examining SPAC mergers from 2004 through 2021, we find that 80% of firms provide projections for four years ahead on average, with approximately one-quarter of recent projections extending more than five years. For the sample of SPAC mergers with observable post-merger revenue, we find that only 35% of firms meet or beat their projections. This proportion declines for forecasts that are longer horizon, and non-serial SPAC sponsors miss forecasts by greater percentages.

This course is a unique opportunity to create a thoughtful roadmap for succession in your family business. Come explore family business continuity challenges and common practices for successfully leading family-owned enterprises. Emphasis is placed on the importance of open, transparent communication in the family; the creation of a shared vision for the business; and the alignment of family and business goals.

Employee spinouts, startups founded by prior employees of existing industry firms, play a critical role in firm creation and knowledge transfer within and across industries. Their superior performance often arises from resources and knowledge accrued during employment in parent firms. An understudied question relates to whether prior employment in parent firms impacts an employee spinout’s alliance formation, given that alliances are critical to the survival and commercial success of startups. This article examines when employee spinout’s alliance partners overlap with their parent’s partners. Drawing on alliance formation patterns of U.S. medical device spinouts founded between 1990 to 2013, we find that spinouts extending their parents’ technologies tend to have more alliance partner overlap with their parents, whereas product market overlap leads to fewer overlapping partners.

Join the Family Enterprise Center and your family business peers to learn how to leverage strategic thinking to achieve your family business goals.

As the pandemic forced shutdowns across the globe, U.S. government entities at the federal, state and local levels worked swiftly to secure known drivers of economic growth and job creation – including entrepreneurial ecosystems and small businesses. And while the programs implemented were widely lauded as successful, the story of who benefitted – and who did not – is more complex. This week’s Kenan Insight explores our experts’ key findings around the roles of policy and implementation in supporting equal access to opportunity.

Our Entrepreneurship Experts

Sekou Bermiss

Associate Professor of Strategy and Entrepreneurship, UNC Kenan-Flagler Business School

Chris Bingham

Professor of Strategy and Entrepreneurship, Phillip Hettleman Distinguished Scholar and Area Chair of Strategy and Entrepreneurship, UNC Kenan-Flagler Business School

Jason Doherty

Director of the Startup Consulting Program, Kenan Institute of Private Enterprise

Vickie Gibbs

Executive Director, UNC Entrepreneurship Center

Mahka Moeen

Associate Professor of Strategy and Entrepreneurship, UNC Kenan-Flagler Business School

Centers & Initiatives

Frontiers of Entrepreneurship

Exploring emerging issues to advance a new era of entrepreneurship

Entrepreneurship Center

Inspiring, motivating, and developing entrepreneurial leaders who will create a positive impact in the world, locally and globally.