From riches to rags: a narrative approach to entrepreneurs' experience of venture failure

This paper investigates entrepreneurs’ experience of stigma associated with venture failure. We implement a narrative approach to understand how stigma was experienced personally by entrepreneurs. Findings draw on the lived experience of 12 entrepreneurs and tell a collective story of what stigma meant and how it affected entrepreneurs’ actions, behaviors, and decisions as they anticipated, enacted, and moved beyond venture failure. Overall the paper shifts the focus of stigma research from the socio-cultural perspective that constitutes the bulk of research to date, to the level of the microprocesses underlying these socio-cultural trends. Importantly, findings show how entrepreneurial failure engendered epiphanies or sudden deep insights for entrepreneurs that ultimately transformed failure from a very negative to a positive life experience. This transformation inspired entrepreneurs to contribute their knowledge gained through failure to future entrepreneurial efforts, even if these efforts were not their own. We discuss implications of findings for failed entrepreneurs’ future start-ups and for the application of learning from venture failure