New Technology-Based Firms’ search for smart investment ties

Previous research has taught us a lot about professional investors, how they select investment objectives, how they add value to startups, and the risk factors associated with raising capital from different investors. However, less is known about how entrepreneurs search for investors, especially in regard to the investors critical non-financial value-adding capabilities. Much less is known about whether entrepreneurs align their search for investors with their respective organizational needs and objectives. Using an inductive theory-elaboration approach and data from five Norwegian startups in the software industry, we address this gap. We propose that a New Technology Based Firm’s fundraising experience is an important determinant for how they search for investors. We also find that different aspiration levels and perceptions of fundraising norms influence how NTBFs search for investors. Lastly, we shed light on novel aspects that imply that there is a potential for NTBFs to search for smarter investment ties. Overall, our findings have implications for, and add insight to, theories about interorganizational strategies, entrepreneurship, and problemistic search - especially in regard to how NTBFs perform strategic maneuvers in their search for investor processe