| A salient issue for new biotechnology firms in their founding period is to obtain external capital. Without internally generated revenues, such nascent ventures need external sources of financial capital to survive the early founding phase (Robbins-Roth, 2000; Terpstra and Olson, 1993). While entrepreneurial search may be a defining factor for future organizational learning (Huber, 1996), not very much is known about this phenomenon. The literature predicts that the firms' founders and geographic location might influence this entrepreneurial process. To date, however, we have a limited understanding of how this process actually occurs. Thus, the purpose of this study is to explore how contextual factors influence new biotechnology firms' in their search for early funding.; A multiple case study methodology was used for this study (Eisenhardt, 1989a, b; 1990; Yin, 1994). Factor analysis and clustering techniques were used to develop a founder learning goal orientation construct. This construct measured the influence of founder's individual characteristics on the entrepreneurial search process. As location was also predicted to be an important determinant by prior research in entrepreneurship, this study was conducted in the two distinct geographies of Zurich, Switzerland and Pittsburgh, U.S.A. Five biotechnology firms' search for early financial capital in each of these regions was investigated for the purposes of this study.; This study's findings suggest that differences in search patterns can be attributed to the founder's learning goal orientation and social network, and the stage of the firm's technology and/or product. The timing of when the search for funding was carried also played some role in this process. However, contrary to what was predicted by the literature, the geographic location of the new biotechnology firm was not seen to have as significant a role in entrepreneurial search. In the entrepreneurial search process, geography affected the type of organizations firms could go to for funding but not their actual search pattern. Lastly, implications of this study's findings for both practitioners and academics are also noted. |
