Dear Colleagues,
Our next virtual seminar in the Entrepreneurship and Innovation Policy Research series is Wednesday, February 18 from 11:00-12:00 ET. Jay Habegger (University of Maryland) - will present. "Searching for Schumpeter beyond Sand Hill Road: Estimating Innovation Ventures using Multiple Systems Estimation." Abstract is below. Click the link HERE to register for the February 18th seminar.
We hope you join us!
- Tim Folta (UCONN), Maryann Feldman (ASU), and Supradeep Dutta (Rutgers U)
Abstract: Innovative ventures that drive Creative Destruction are central to economic growth, yet identifying them ex ante-before success is observed-remains a core challenge in entrepreneurship research. Existing approaches rely either on ex post revealed growth outcomes or on proxies for entrepreneurial intent, but both struggle with a fundamental non-complier problem: innovative ventures that intend to innovate but do not, and ventures that do not intend to innovate yet do so nonetheless. This study proposes an alternative perspective: ventures at risk of Schumpeterian entrepreneurship are revealed not by outcomes or intent, but by securing an initial equity investment-although not necessarily from VCs. Combining this insight with capture–recapture, a method frequently used in biology and epidemiology, the paper leverages systematic differences in coverage across commercial VC databases to estimate the size of the otherwise hidden population of initial equity investments from 2009–2020. The results show that existing VC databases undercount initial equity investments by a factor of four, particularly missing smaller, geographically dispersed companies. Contrary to prevailing views, innovative ventures appear to be an increasing share of young firms. These findings challenge how scholars and policymakers assess entrepreneurial dynamism and suggest that the stock of innovative ventures is both broader and more geographically diffuse than commonly assumed
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