MscBA Entrepreneurship and New Business Venturing
Master Thesis
Entrepreneurs’ searching for capital through their
network ties: An empirical study in the
Greek semiconductor industry
Nikolaos Nakos
Coach: Dr. Willem Hulsink
Co-Reader: Dr. Vareska Van de Vrande
Rotterdam 2008

MscBA Entrepreneurship and New Business Venturing
Entrepreneurs’ searching for capital through their
network ties: An empirical study in the
Greek semiconductor industry
Startup entrepreneur:
the person who sets up a
new company

MscBA Entrepreneurship and New Business Venturing
seed capital : financial
resources that entrepreneurs
need at the initial stages of
their firm to conduct a market
research,buy equipments and
facilities and pay the
operational costs
Entrepreneurs’ searching for capital through their
network ties: An empirical study in the
Greek semiconductor industry

MscBA Entrepreneurship and New Business Venturing
Entrepreneurs’ searching for capital through their
network ties: An empirical study in the
Greek semiconductor industry
Network ties: Strong
ties (Family,Friends,close
(ex)colleagues )
Weak ties (business
contacts, acquaintances)

MscBA Entrepreneurship and New Business Venturing
Entrepreneurs’ searching for capital through their
network ties: An empirical study in the
Greek semiconductor industry
The empirical setting:
high-tech Greek firms
which design
microprocessors for
several applications

Purpose & value of the study
the use of social networks influence the new venture creation process
the use of social networks can lead entrepreneurs to resources
Financial resources are fundamental for the startup of a firm
Relarionship between social networks and financial resources
This relationship is understudied
The first research ever made in the Greek Semiconductor industry

Purpose & value of the study
the use of social networks influence the new venture creation process
the use of social networks can lead entrepreneurs to resources
Financial resourcesMain research for the startup of a firm
are fundamental question:
How startup entrepreneurs of the high-tech sector use their
network ties to get access to sources of capital?
Relarionship between social networks and financial resources
This relationship is understudied
The first research ever made in the Greek Semiconductor industry

Theoretical Concepts
Entrepreneurship
Human Capital
Social Capital
The strength of ties
Sources of Funding

The Greek Semiconductor Industry
35 firms & 15 research institutes
organizations: Hellenic
Semiconductor association &
Corallia (Clustering initiative)
700 employees
60 mil. € turnover
30 mil. € investments
Future projections: 150 companies
& > 300 mil. € turnover in 2012

Methodology
Research Design
Qualitative method
Comparative case study (Within & cross case analysis)
Semi-structured interview
Measuring networks ties (Granovetter, 1973)
Frequency of contact
Emotional intensity of the relationship
Degree of intimacy
Reciprocal commitments within the relationship

The Case Studies
7 Case Studies
Founding year from 2000 to 2007
Located in the two main technological
centers of Greece: Attica & Patras
Specialized in designing services & consulting
Founder’s Background: Master & PHD studies in electronic
engineering, no prior entrepreneurial experience, some of them
prior working experience

Analysis
Type of Ties
Companies
Strong Ties Weak Ties
Bootstrapping:
ALMA Technologies - Family’s funds -
- Co-founders’ funds
The firms were founded by teams of
Bootstrapping:
Diaplous Ltd. - engineers
Co-founders’ funds
Bootstrapping:
Elxys Innovations -
Co-founders’ funds Additional members in the founders’
team brought financial resources
Bootstrapping: European and State
InAccess Networks
Co-founders’ funds subsidies
Bootstrapping:
Bootstrapping methods appeared
Think Silicon -
Co-founders’ funds
in all cases
Private equity
Bootstrapping: company
Analogies S.A.
Co-founders’ funds & European and State
Weak ties were used only in the
subsidies
private - financed firms
Bootstrapping: Venture Capital
Helic
Family’s funds Company

Findings
The use of strong ties lead to the acquisition of capital through
bootstrapping
Weak ties found to be significant for the acquisition of external
financing (equity finance)
Entrepreneurs who did not raise funds from investors did not
make use of weak ties
Weak ties are more important than strong ties for the
acquisition of external financing at the startup stage

Limitations & Further Research
Limitations
Single static point of time
Identification criteria of ties
Time & resource restrictions
No previous research in the specific context
Further Research
Conduct the research in other emerging economies like Balkans and Eastern
Europe
Measure the influence of human capital
Implications for nascent entrepreneurs

human capital
entrepreneurship
weak ties
strong ties
high - tech
Keep your contacts warm!
networks
bootstrapping startups
venture capital
social capital
Greece

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