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Guangnian Song

DBA Graduate - 2019

Thesis title

Relations between Chinese entrepreneur's social network, entrepreneurial competency and initial capital obtaining


Jicai Liu
Purpose A new venture’s establishment and development need sustaining capital input and re-input. Therefore, capital has a crucial significance to a new venture’s starting and developing; and meeting a new venture’s need for capital is a matter that entrepreneurs should pay attention to at each stage of the new venture’s development. A new venture often encounters that kind of problem and it is often difficult for a new venture to get investors’ trust due to its small scale, small amount of tangible assets that can be motorgaged, opaque financial information, high operation uncertainty, weak ability of resisting external impact and lack of credit history. Thus insufficient capital usually becomes the bottleneck when a new venture starts.As social capital theory permeates to organizational management area, social network has become an effective way for a new venture to communicate and spread information, and effectively helped a new venture to obtain initial capital. Even though social network and venture financing theory research is just at a rudimentary stage in Chinese academic community, the importance of social network for a new enterprise to obtain initial capital has been widely identified and drawn new entrepreneurs’ attention. Therefore, it is singnificant to find out the influence mechanism of social network to new ventures. Methodology This thesis classifies initial capital into internal capital and external capital according to capital source. From the point of how social network affects obtaining of initial capital, this thesis explores entrepreneurial competency’s influence on internal capital in social network. As for research method, this thesis combines qualitative analysis and quantitative analysis, systematic literature review and theoretical analysis, and applys in-depth interview, questionnaire suvey, large-scale sample statistical processing to conduct empirical study to ensure reasonable, and practical research findings. Lastly, this thesis puts forward reasonable and practical suggestions according to the research conclusions. Findings The research conclusions of this thesisare as following: 1. Social network size has negative relationwith the enterprise’s initial internalcapital, and has no obvious relation with external capital; 2. Social network intensity has positive relation with the obtaining of initial internaland external capital; 3. Social network heterogeneity has no obvious relation with enterprise’sinitialexternal capital; 4. Social network size has no obvious relation with entrepreneurial competency, while social network intensity andsocial network heterogeneity has positive relationwith entrepreneurial competency; 5. Entrepreneurial competency is an intermediary for the positive relationbetween social network intensity and obtaining of internalcapital, also between social network heterogeneity and obtaining of internalcapital.Keywords Social network, Newventure, Initial capital, Entrepreneurial competency