Research On The Effect Of Social Network On New Venture Finance And Performance

New venture Finance has been continuing a popular topic in academic research. Investment, maintaining and re-investment a certain amount of funds is the presupposition for the creation, survival and development of new ventures. The capital plays the pivotal role for the establishing and growth of new venture. Identification of the capital requirement becomes the primary consideration for entrepreneurs on each stage of new venture process.The large demand of capital, especially in the setting up period, bring on the problem that the self-owning raising from the enterprises is unable to meet various business needs for new venture development, therefore, external financing appears to be very important. However, because of the constraints of new venture, such as small-scale assets, the majority of intangible assets, non-transparent financial information, management uncertainty, weakly to endure for the external economic shocking, coupled with lack of credit history, resulting weak credit guarantee, it is difficult to obtain the confidence of external investors. Seeking and acquisition of external finance becomes arduous. Capital issue turns to be the biggest "bottleneck" problem during the creation and grow-up process of start-up. Countering the characteristics and the difficulties faced by the new venture,entrepreneurial network acts a crucial role as the access to funding information and communication and proceed to be effective solution to external finance attainment. According to the inquisition, the range of entrepreneur social network has a direct influence on entrepreneurial financing activities. Meanwhile Social Network Theory becomes a powerful tool for the explanation on entrepreneurial financing phenomenon gradually. Despite the research on entrepreneurial network and entrepreneurial finance is still in the initial state in China, the essential function of entrepreneurial network on acquirement of entrepreneurial finance and further enhancing of new venture performance has been recognized. More and more concerning on the research of impact of the network on entrepreneurial finance is being paid attention to. Although some results has been showed in the research field of entrepreneurial finance and entrepreneurial network, the present research still needs to be improved in systematization and depth. The general study is mainly concerned on the function of entrepreneurial network on entrepreneurial finance summarily. Unfortunately, domestic academes seldom study the efficiency of entrepreneur’s social networks empirically, while foreign researchers have been interested in "the network approach to entrepreneurship" broadly. Furthermore, when present researchers were talking about entrepreneur’s social networks, they usually emphasized particularly on its "result", the influence of entrepreneur’s social capital to entrepreneurial action, rather than its "cause’, the factors which impact on the mobilization of social capital by entrepreneurs during their entrepreneurial process.According to this research space, this dissertation has a comprehensive analysis on the present theoretical and development practice literatures of entrepreneurial network, entrepreneurial finance and new venture performance. On the basis of Trade-off Theory, Agency Theory, Pecking Order Theory and Social Network Theory, this dissertation integrates the entrepreneurial network, entrepreneurial finance and new venture performance into one organic system framework, and constructs the theoretical concept model of the effect mechanism among the elements of entrepreneurial network, entrepreneurial finance and new venture performance, then puts forward the relevant theoretical hypotheses. With this model the systematical study on the effect of entrepreneurial network on new venture finance is carried out, furthermore the new venture performance is utilized as the ultimate results of entrepreneurial finance activities.To the methodology, the dissertation uses qualitative analysis and the quantitative analysis. Besides the systemic literature review and theoretical discuss about three key questions involved in this study, the dissertation also uses individual visiting, investigating in small scope and questionnaire statistic in large scale to ensure the study result in reason and in practice.By the empirical testing, the main conclusions of the dissertation are as follows:First is the effect mechanism of entrepreneurial network on new venture finance type, including network size has the positive effect on the access to the internal debt finance and the external finance for new venture; network heterogeneity has the negative effect on the access to internal equity finance and the positive effect on the access to the external finance for new venture; network intensity has the negative effect on the access to internal equity finance, has the positive effect on the access to the internal debt finance and the external finance for new ventureSecond is the impact of new venture finance type on new venture performance, including the positive impact of internal equity finance on new venture performance, the positive impact of internal debt finance on new venture performance, the positive impact of external equity finance on new venture performance and the positive impact of external debt finance on new venture performance. Third is the selection preference of entrepreneurs to the different new venture finance type, including is the selection preference of internal equity finance is stronger than external equity finance.In contrast to other research about entrepreneur’s social network, the innovation and theoretical development of this research are embodied in several aspects:(1)It expatiates on three dimensions of Chinese entrepreneur’s social network. Based on the comprehensive review to the structural and resource feature of entrepreneur’s social network, it puts forward access approaches of social network, and tests them empirically.(2)It builds a new model to test the impact from entrepreneur’s social network to financing options and performance. Using the data from first hand, it explores the influence from structural and resource dimensions of social network to financing options and performance empirically.(3)Using the concept of "social network", it constitutes a framework systematically to explain the relation among the origin of social network, financing options and performance. The framework will improve the ability of forecast and interpretation of entrepreneur’s social network theory, and enrich the outcomes of social network research.