ABSTRACT In the dynamic and uncertain entrepreneurial environment, effective leadership and team dynamics are crucial for new venture success. This study investigates how and when a lead founder’s paradoxical leadership helps the new venture navigate the tensions in entrepreneurial processes by shaping key mechanisms within new venture teams (NVTs). By integrating social information processing theory with emotion-as-social-information theory, we argue that paradoxical leadership enhances NVT psychological safety, which in turn facilitates debate in strategic decision-making and improves long-term venture survival. These positive effects are more pronounced when the lead founder displays high levels of entrepreneurial passion. We test our model using multi-source, multi-wave survey data from 238 entrepreneurs nested within 85 NVTs. Our findings advance the scholarly understanding of paradoxical leadership in entrepreneurship, highlighting the joint impact of leadership behavior and affect in shaping entrepreneurial outcomes.

ABSTRACT Small and medium-sized enterprises (SMEs), particularly innovative SMEs, face significant challenges in accessing credit. This paper examines how performance-pay for executives affects borrowing discouragement in innovative vs non-innovative SMEs. While literature establishes a significant relation between performance-pay and leverage, no prior manuscript investigates its impact on borrowing discouragement as a form of credit-rationing. This study analyzes 17,404 SMEs from 47 countries using World Bank Enterprise Surveys data, focusing on performance-pay, innovation, and borrowing discouragement. Results show that performance-pay does not impact fear of rejection regardless of firm innovativeness. However, it reduces discouragement from loan terms due to better creditor alignment. In contrast, innovative SMEs—especially those pursuing radical innovation—face the opposite effect: performance-pay reduces fear of rejection but heightens discouragement from stricter loan conditions imposed by wary lenders. This highlights a trade-off where innovation incentives may improve long-term growth but worsen access to credit.

ABSTRACT Validated learning plays a critical role in the lean startup approach to entrepreneurship education. We argue that, compared to validated learning from business generalists, student entrepreneurs who seek feedback from technical specialists develop superior minimum viable products (MVPs). We further suggest that the different effects of feedback from business generalists and technical specialists on the quality of MVPs are mediated by student entrepreneurs’ failure analysis. Using a between-subjects, randomized field experiment with a longitudinal design, we find our hypotheses supported. The results indicate that validated learning from technical specialists, in addition to business generalists, should be incorporated into the lean startup pedagogy to guide student entrepreneurs for better MVPs.

ABSTRACT This study examines the effect of entrepreneurial under- and overconfidence on small and medium-sized enterprises’ (SMEs) external financing decisions and outcomes. In addition to the conventional wisdom that overconfidence leads to suboptimal financing decisions and higher financing costs, we contend that moderate overconfidence induces entrepreneurs to commit costly efforts, which is seen as a favorable signal by financiers. We test this trade-off hypothesis using a large sample of UK SMEs and a novel measure of overconfidence. We find significant nonlinear relationships between overconfidence and alternative measures of financial demand and supply. Specifically, we show that mildly overconfident entrepreneurs are less likely to receive the loans applied for than both unconfident and extremely overconfident ones.

ABSTRACT Research on talent management (TM) in family-owned firms (FOFs) often focuses on non-family professionals (NFPs), overlooking family successors (FSs), while succession research does the reverse. This creates a gap in understanding how TM and succession adoption affect both groups. Drawing on 35 in-depth interviews with NFPs and FSs, we adopt a relational, multilevel lens to examine inhibitors and facilitators across macro-socioeconomic, meso-organizational, and micro-individual levels. At the macro level, gender inequality and patriarchal authority inhibit TM and succession, while “baradari or clan culture” supports NFPs’ TM. At the meso level, informal governance and multiple reporting lines inhibit both processes, but spontaneous decision-making hinders FSs’ succession while aiding NFPs’ TM. At the micro level, owner syndrome impedes both TM and succession for FSs and NFPs, whereas development initiatives support both. The study’s novel contribution is to use and adapt Syed and Özbilgin’s relational, multilevel perspective to present an integrated and dynamic view of TM and succession in FOFs.

ABSTRACT Effective leadership communication in startups is crucial for business survival, as founders interact more directly with employees than leaders in established organizations. While vision communication is known to motivate employees and support growth, how startup leaders communicate vision and how employees perceive it amid constant changes remain underexplored. This study addresses this gap by investigating vision communication in early-stage startups operating in dynamic environments through qualitative methods. The study found that, unlike leaders in established organizations who are encouraged to communicate a clear and stable vision, startup leaders often articulate flexible and evolving visions that adapt to market demands and organizational development. These findings contribute to entrepreneurial leadership communication by showing how vision communication varies in uncertain situations in the startup context and offer practical guidance for founders seeking to engage employees and manage ongoing change.

ABSTRACT This study examines how “negative” management control systems condition the performance implications of entrepreneurial orientation (EO) in SMEs. Building on Simons’ levers of control framework, we focus on diagnostic control systems and boundary systems, conceptualized as negative forces, and theorize that the EO–performance relationship is shaped by their configurational rather than isolated use. Using survey data from 276 French SMEs and structural equation modeling, we test a three-way interaction between EO, diagnostic control systems, and boundary systems. Our results confirm a positive EO–performance relationship and show that this effect is preserved when SMEs rely on diagnostic control systems and boundary systems in a balanced way, whether at high or low levels, but largely disappears when one lever is overemphasized at the expense of the other. We thus uncover an entrepreneurship–control trap in which misaligned negative controls prevent SMEs from converting EO into superior performance.

ABSTRACT Selling is essential to entrepreneurial businesses, but research on the integration of selling and entrepreneurship is largely under-conceptualized. By integrating influence tactics theory for effective selling with the dual processing model, this research theorizes that influence tactics help crowdfunders form an intuition when evaluating crowdfunding projects. However, the effectiveness of influence tactics on crowdfunding performance depends on analytic thinking triggered by entrepreneurs’ previous crowdfunding experience. Using data from 43,613 projects on Kickstarter, we constructed new measures for influence tactics using the BERT model. The empirical results generally support our conceptual framework of the interactions between influence tactics and entrepreneurs’ crowdfunding experience on fundraising performance.

ABSTRACT Integrating social cognitive theory and intersectionality research, this study examines how individuals develop entrepreneurial intentions (EI) and entrepreneurial self-efficacy (ESE) while living in extreme contexts and being exposed to intersecting systems of oppression. Moreover, we examine how EI and ESE interact in the process. Based on in-depth interviews, we demonstrate how Lebanese women residing in rural areas, all over the age of 50 and from modest socioeconomic backgrounds, emerge as necessity entrepreneurs and develop their EI driven by need, strong agency, and parental love. We ascertain that sexism, ageism, classism, and location in the rural periphery initially undermine ESE and weaken the EI of women. We also establish how these entrepreneurs gradually develop ESE through emotional regulation and cognitive reframing of their experience-based capabilities, which, in turn, strengthens their EI. Our study contributes to entrepreneurship literature by showing that ESE and EI mutually reinforce (or weaken) one another as entrepreneurs navigate the intersecting systems of oppression in extreme contexts.

ABSTRACT In early-stage entrepreneurial teams, trust perceptions about new teammates shape venture compatibility and performance. With AI adoption in entrepreneurial teams, early trust dynamics are underexplored. This study investigates trust formation and recalibration when a new teammate is AI, a human, or a human using AI. In a scenario-based experiment with 205 participants, we measured trustworthiness, affective trust, and cognitive trust before and after observing a new teammate’s work. AI teammates began with lower affective trust but gained significantly after observation, while human-using AI teammates were trusted similarly, or more than non-augmented humans. Cognitive trust declined across all teammates but remained comparatively stable for AI. Findings contribute to entrepreneurship and human-AI teaming research by showing that trust calibration depends on teammate type and competence, and by introducing augmented teammates as a distinct category. Practically, ventures adopting AI may benefit from augmentation, with clear human accountability and disclosure of AI capabilities, fostering higher early-stage trust.