Resource acquisition strategies of entrepreneurs: the use of outside resources

This research was concerned with how entrepreneurs acquire resources in starting new businesses. Emphasis was placed on the strategy of using outside resources which was characterized by the efficient use of a resource which had been acquired using short term, recurring expenses and which minimized the drain on the firm's assets. In addition, this work was also concerned with discovering what other resource acquisition strategies were used by entrepreneurs. A mail questionnaire and field interviews were used to collect quantitative and qualitative data. A general hypothesis was tested for five different kinds of resources: technical, marketing, financial, and general management information, as well as R&D and production equipment. The hypothesis suggested that, given equal startup complexity, firms which utilized a high degree of outsourcing would take less time to achieve firm milestones than firms which utilized less outsourcing. The relationship was shown to be statistically significant for technical information but in the direction opposite from that predicted. Technology-based companies may be better off if the technical ideas are in the heads of the founders. Also, qualitative data revealed that entrepreneurs used many pre-venture resource acquisition strategies which influenced the amount of outsourcing used after startup. Several generalized resource acquisition strategies were uncovered in the qualitative portion of the study. These included pre-venture searches, partners with resources, transfers from parent and incubator organizations, bridge businesses, and the use of personal resources for business purposes. The quantitative and qualitative findings were merged into a new expanded model of the resource acquisition strategies of entrepreneurs. Several propositions were suggested to test the tenets of the model.