Thanks, but No Thanks: Examining Entrepreneurial Optimism, External Funding, Joint Venture Partnerships, and New Venture Performance

Using a proprietary dataset of entrepreneurs receiving a government technology award, I explore how entrepreneurial optimism can impact the decision to accept external funding , to enter into joint ventures, and on firm performance. Although prior research suggests optimism about the success of a venture might motivate entrepreneurs to seek outside funding and to enter in to joint venture partnerships (with mixed results on performance), how high levels of optimism would instead motivate entrepreneurs to not receive such outside help is explored. Results suggest optimism has a non-linear relationship with accepting outside help, which leads founders to receive less external funding and instead choose to “go it alone.” Further, results show rewards for highly optimistic entrepreneurs, which is contrary to previous findings and has implications for researchers and practitioners alike