The Service Role of Outside Boards in High Tech Start-ups: A Resource Dependency Perspective

Authors


  • The authors would like to thank the Flemish government and the ‘Steunpunt Ondernemerschap, Ondernemingen en Innovatie’ for its financial support in data collection. Further, we thank Flanders District of Creativity for financially supporting the international exchange that led to this paper. The authors would further like to thank the participants of the 2009 Babson Entrepreneurship Conference and Elien Vandenbroucke, Truls Erikson, Abigail Levrau, Annelore Huyghe and Yves Fassin for providing useful comments on an earlier version of the paper.

Corresponding author email: Mirjam.Knockaert@ugent.be

Abstract

Despite growing interest in the board of directors of entrepreneurial firms, the role of outside board members in high tech start-ups has been largely neglected. This dearth of research is surprising since the high level of resource dependency these ventures face is likely to heighten the potential contribution outside board members can make. We argue that, for high tech start-ups, the service role the board plays will be crucial in overcoming resource dependencies. In contrast to existing studies that tie the outside boards’ servicing role to board characteristics, we propose that greater attention needs to be paid to the resource profile of the venture. Building on resource dependency theory, we find that the extent to which the outside board members fulfil a service role is dependent on the initial human, financial and technological resource base of the entrepreneurial venture. Specifically, we find that ventures with less diversified teams, teams with lower levels of R&D experience and higher levels of financial experience and ventures earlier in the technological development process receive higher levels of support from the outside board.

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