• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.4
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• pp.1-18
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• 2019

Venture capitalists (VCs) play an important role in finding and growing innovative venture companies with high growth potential but high risk. Venture capital investment does not depend on the system, unlike the investment for listed companies. Korea's venture capital industry has entered a period of growth, but lack of data has led to a lack of research on venture capital. Based on this background, this study attempts to analyze various factors affecting investment decision criteria of Korea VCs. In this study, I examined the major factors that VCs consider in decision making of investment through literature review, and I have drawn the research question accordingly. I will focus on the characteristics of founders, products / services, markets, financials, and networks that scholars share common investment decision criteria in Korean VCs. For the purpose of this study, the data were collected through the questionnaire surveyed by investment vetters working in current venture capital and analyzed using AHP analysis. Through this study, I tried to understand the Korean venture capital which has been poorly studied and what criteria and priorities Korean VCs make investment decisions in the Korean venture investment environment. The results of this research will contribute to the vitalization of venture investment, which is important for the upbringing of companies, by providing guidelines for establishing investment attraction strategies of venture companies.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.6 no.1
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• pp.109-132
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• 2011

While the resource-based view suggests that a firm's competitive advantage rests on a set of valuable, rare and inimitable resources more generally (Barney, 1991), research in new firms has more specially indicated a link between initial resources and early performance and survival (Bruderl and Schussler, 1990; Fichman and Levinthal, 1991; Carroll et al., 1996). The RBV primarily focuses on the particular resources, and their characteristics, that provide the potential for advantage (Conner, 1991). Yet in order to realize this advantage, organizations must not only develop their resources, but also effectively deploy them (Admit and Shoemaker, 1993). This suggests that advantage from resources may reside in both the input (resource development) side and the output (resource deployment) side. This research looks at venture survival as a function of both the resources a firm owns, and the resources it can access from others. We focus more specifically on technology resources, which are among a technology-based firm's most critical resources (Itami, 1987). In addition, technological knowledge can contribute a large portion of the value of a firm's products (Goodman and Lawless, 1994). We look at both the input and output side: the pool of technology resources that serve as an input to a firm's activities, and the market that values and purchases the output of this activity. We take an international perspective, examining whether resources explain internationalization on the input and output side, and in turn, whether this internationalization can explain survival. We explore three sets of questions. First, can survival in entrepreneurial firms be explained as a function of the resources a firm owns, and beyond that, to those the firm can access, and still further, to those the firm can access internationally? Second, do resources explain internationalization on both the input and output side? And finally, does internationalization explain survival? Implications for theory include extending the RBV to not only include a firm's resources, but its access to the resources of other entities. In addition, examining internationalization on both the input and output side enables us to understand not just the potential advantage of resources, but the manner in which they are deployed as a source of advantage. This research also contributes to the literature on international entrepreneurship by examining whether internationalization can explain survival for early stage firms. For practitioners, this research will provide insights on the importance of building alliances and, in so doing, broadening an organization's perspective about the technology resources available to the firm on the input side. The study will also inform practitioners about the value of maximizing the market for a firm's valuable resources. In addition, this research provides an extraordinary opportunity to access a large, comprehensive, and longitudinal dataset on technology-based ventures in Korea.

• Journal of Distribution Research
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• v.17 no.3
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• pp.1-24
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• 2012

Franchises have recently emerged as the most rapidly expanding industry positioned to create a large impact in the domestic economic. The Chinese franchise industry developed rapidly in the period prior and subsequent to WTO accession with more than 50% of new franchises brands emerging since 2000. M&A transactions in the Chinese franchise industry have progressed actively. In the period from 2005-2007, due to the wholesale and retail market opening in accordance with the guidelines laid forth within the MOU by the WTO the Chinese franchise market is now the largest market in the world all despite a short history of only 20 years. The amount of franchise market research on China is disproportional to its current size and development potential. Beginning in the 1990s, market research conducted by the International Franchise Association focused on emerging markets in Eastern Europe and China. While the research dealt with the Chinese investment environment, it insufficiently explained the market region and cultural environment. The purpose of this research is (i) to investigate the determinants of the performance of franchise systems in China and (ii) new contract renewals based on performance factors. This study will complement existing research in terms of the franchisee perspective. This study may also prove of the benefit to the franchise companies entering the Chinese franchise market enabling them to develop an effective strategy. This study shows that support, incentives, and system standardization by franchisor yielded a positive effect on management performance. This is consistent with previous studies by Shin (2000) and Kim (2008) targeting Korean franchises. Therefore, in the Chinese market, the franchisor must focus on support, incentives, and system standardization rather than concentrate only on the recruitment of franchisees in order to improve revenue. Hypotheses regarding franchisor control have been dismissed in existing research, in the opinion of this study, due to their complexity and inability to control the merchant as a one-kind-assessment-standard. Our findings show that the franchisees' financial condition, management ability and entrepreneurial spirit, among franchisee's characteristics, have a positive effect on franchisor's business performance and satisfaction for the franchisee. This is consistent with previous studies on headquarters' management performance of Lussier (1996), Heo and Jang (2008), and franchisees' financial condition, management ability and entrepreneurial spirit effect on franchisor's satisfaction of Weaven and Franzer (2007), Kim (2009), Han (2009), and Yoon etc. (2008). Therefore, when permitting a franchisee, financial condition, management ability, entrepreneurship of the franchisee should be carefully considered. Among relational factors between franchisor and franchisee, trust has the positive influence on the management performance of the franchisor while conflict has a negative effect. However, trust, commitment and conflict factors have been shown not to have any impact on the satisfaction of the franchise headquarters. This result is consistent with the previous studies of Pavlou and Ba (2000), Morrison (1999), Weaven and Frazer (2007), Kim and Park (1994), Sohn (2007) which show that trust between franchisor and the franchisees have a positive effect and that conflict has a negative impact on franchisor's management performance. Other factors causing a negative effective on the franchisor's management performance are a rapid environmental changes and uncertainty in the business. This is consistent with Campbell et al (2007), Kim and Kim (2009), Han and Baek (2008). Finally, the high management performance and satisfaction of the franchise headquarters has a positive effect on the intention of franchise renewal. In the case of large markets such as China, the franchisor's strategy and the role is very important. In this study, we also investigated the characteristics of franchisor and franchisee, relationship, and environmental uncertainty affecting on the management performance and satisfaction of franchisor. Recently, Korean franchises are attempting to enter foreign markets through the rise in popularity of Korean culture and entertainment commonly referred to as the Korean wave. This study provides recommendations for Korean franchises intending on entering the Chinese market. First, in order to achieve stable profits, the franchise corporation needs to support the operation of the individual franchisee through incentives and standardization of services. Second, because trust between the franchisor and franchisee has a positive effect on management performance, on-going discussion and cooperation is necessary to reduce the level of conflict.

• Journal of Global Scholars of Marketing Science
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• v.18 no.2
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• pp.65-88
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• 2008

Since the implementation of economic reforms in 1978, the Chinese economy grows rapidly at an average annul growth rate of 9% over the post two decades. Franchising has been widely recognized as an important source of entrepreneurial activity. Trust is important in that it facilitates relational exchanges by permits partners to transcend short-run inequities or risks to concentrate on long-term profits or gains. In the relationship between the franchisors and franchisees, trust has been described as an important source of competitive advantage. However, little research has been done on the factors affecting trust in Chinese franchisor-franchisee relationships. The purpose of this study is to investigate what factors affect the trust in the franchise system in China, and to provide guidelines and insights to franchisors which enter Chinese market. In this study, according to Morgan and Hunt (1994), trust is defined as the extending when one party has confidence in an exchange partner's reliability and integrity. We offered a conceptual model of the empirical study. The model shows that the factors affecting the trust include franchisor's supports, communication, satisfaction with previous outcome and conflict. We also suggested the franchisor's supports and communication like to enhance the franchisee's satisfaction with previous outcome, and the franchisor's supports, communication and he franchisee's satisfaction with previous outcome tend to decrease conflict. Before the formal study, a pretest involving exploratory interviews with owners from three franchisees was conducted to make sure the questionnaire was relevant and clear to the respondents. The data were collected using trained interviewers to carry out personal interviews with the aid of an unidentified, muti-page, structured questionnaire. The respondents comprised of owners, managers, and owner managers of franchisee-owned food service franchises located in Beijing, China. Even though a total of 256 potential franchises were initially contacted, the finally usable sample consisted of 125 respondents. As expected, the sampling method was successful in soliciting respondents with waried personal and firm characteristics. Self-administrated questionnaires were used for all measures. And established scales were used to measure the latent constructs in this study. The measures tapped the franchisees' perceptions of the relationship with the referent franchisor. Five-point Likert-type scales ranging from "strongly disagree" (=1) to "strongly agree" (=7) were used throughout the constructs (trust, eight items; support, five items; communication, four items; satisfaction, six items; conflict, three items). The reliability measurements traditionally employed, such as the Cronbach's alpha, were used. All the reliabilities were greater than.80. The proposed measurement model was estimated using SPSS 12.0 and AMOS 5.0 analysis package. We conducted A series of exploratory factor analyses and confirmatory factor analyses to assess the convergent validity, discriminant validity, and reliability. The results indicate reasonable overall fits between the model and the observed data. The overall fit of measurement model were $X^2$= 159.699, p=0.004, d.f. = 116, GFI =.879, NFI =.898, CFI =.969, IFI =.970, TLI =.959, RMR =.058. The results demonstrated that the data reasonably fitted the model. We also examined construct reliability and reliability and average variance extracted (AVE). The construct reliability of each construct was greater than.80 and the AVE of each construct was greater than.50. According to the analysis of Structure Equation Modeling (SEM), the results of path model indicated an adequate fit of the model: $X^2$= 142.126, p = 0.044, d.f. = 115, GFI =.892, NFI =.909, CFI =.981, IFI =.981, TLI =.974, RMR =.057. As hypothesized, the results showed that it is strategically important to establish trust in a franchise system, and the franchisor's supports, communication and satisfaction with previous outcome tend to reinforce franchisee's trust. The results also showed trust seems to decrease as the experience of conflict episodes increases. And we also noticed that franchisor's supports and communication tend to enhance the franchisee's satisfaction with previous outcome, and communication tend to decrease conflict. If the trust between the franchisor and franchisee can be established in a franchise system, franchising offers many benefits and reduces many costs. To manage a mutual trust of relationship with their franchisees, franchisor's should provide support effectively to their franchisees. Effective assistant services have direct effect on franchisees' satisfaction with previous outcome and trust in franchisor. Especially, franchise sales process, orientation, and training in the start-up period are key elements for success of the franchise system. Franchisor's support is an accumulated separate satisfaction evaluation with different kind of service provided by the franchisor. And providing support definitely can improve the trustworthy image of the franchisor. In the franchise system, conflicts of interests and exertions of different power sources are very common. The experience of conflict episodes seems to negatively relate to trust. Therefore, it is important to reduce the negative side of the relationship conflicts. Communication actually plays a broader role in reducing conflict and establish mutual trust in franchisor-franchisee relationship. And effective communication between franchisors and franchisees can improve franchisees' satisfaction toward the franchise system. As the diversification of Chinese markets, both franchisors and franchisees must keep the relevant, timely, and reliable communication. And it is very important to improve the quality of communication. Satisfaction with precious outcomes seems to positively relate to trust. Franchisors and franchisees that are highly satisfied with the previous outcomes that flow from their relationship will perceive their partner as advancing their goal achievement. Therefore, it is necessary for both franchisor and their franchisees to make the welfare of partner with effort. Little literature has focused on what factors affect the trust between franchisors and their franchisees in China. This study developed the hypotheses regarding the factors affecting trust in the transaction relationship. The results of data analysis supported the hypotheses strongly. There are certain limitations in this study. First, we may point out that some other factors missed in this study could be significantly important. Second, the context of this study, food service industry, limits its potential generalizability for all franchise systems. More studies in different categories of franchise system are needed to broaden its generalizability. Third, the model was tested empirically in a sample in Beijing, more empirical tests of the proposed model in other Chinese areas are needed. Finally, the analysis in this study was solely based on the perception of franchisees and the opinions of franchisors were not included.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.9 no.4
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• pp.1-12
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• 2014

It is essential factor for business operation to raise funds effectively. However, in Korea, many start-ups and small businesses have difficulties in fund-raising. In recent years, crowdfunding, a new method for funding a project of individuals or organizations by raising monetary contributions from a large number of people, has been growing up simultaneously with diffusion of social media. Crowdfunding is on early stage in Korea, and the majority of projects are focused on cultural or art categories. There is high proportion of projects that have social value in start-up sector. Crowdfunding in Korea has great potential because success rate of it is much higher than its of advanced countries, although market size is much smaller than them. The purpose of this paper is to propose success strategies of crowdfunding for start-up through case study. 5 crowdfunding platforms of Korea and Kickstarter, the platform of United States were investigated. Then we checked the figures related to the operation of the whole Korean projects on start-up. Finally, we made comparison between the cases of success and failure by analyzing 8 project characteristics. The study shows that it were the differences in trustworthiness and activeness of project creator, value of reward and efforts for interactivity that have great effects on success of the project. Whereas there was no significant influence of societal contribution and sponsor engagement. The thesis provides success strategies of crowdfunding for start-up as follows. Firstly, creator of the project should make support base by enthusiastic activites before launching funding project. Secondly, there should be contents that can easily show the process of business development in the project information. Thirdly, there must be appropriate design of rewards for each amounts of support money. Finally, efforts for interactivity, such as frequent updates, response for comments and SNS posting, should be followed after the launch of the project.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.5
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• pp.93-104
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• 2019

The entrepreneurship can be a source of national growth potential as behavioral tendencies of people who seek innovation, take risks of failure, and proactively respond to opportunities. In particular, in the economic situation of Korea where growth has been stagnated, it is necessary to strengthen the entrepreneurship of women which is relatively lower than men's in order to activate the start-up and economic participation of the whole people. In this regard, this study focuses not only on gender differences in entrepreneurship but also on the hidden impact of social contexts that cause gender differences in entrepreneurship. Specifically, this study examined the moderating effects of childbirth, a factor that reflects the social context of Korea in the relationship between gender and entrepreneurship. According to the results of the model that includes the interaction effect of these variables in addition to the independent effects of gender and childbirth, the gender effect disappeared, while the significant effect of both the childbirth variable and the interaction variable of gender and childbirth were confirmed. Furthermore, according to additional analysis, which identified the differences in entrepreneurship by creating four types of treatment groups based on gender and childbirth status, entrepreneurship was significantly lower in the 'female and childbirth' group than in all other groups. The difference between the remaining treatment groups was not statistically significant. These results indicate that differences in entrepreneurship levels between men and women overlap not with the unique trait of men and women, but with the social contextual effects of Korea, where women are under the full burden of childbirth and parenting. This study suggests implications that effective policy measures to promote women's entrepreneurship or economic activity should be taken by taking into account the social context of Korea that suppresses women's entrepreneurial behavior.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.18 no.1
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• pp.13-29
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• 2023

Overcoming the death valley, a period in which resources are depleted and profitability declines or stagnates in the entrepreneurial process, is an essential procedure for success. In this study, we examined how the strategic orientation(technology, customer, competitor orientations) and absorptive capacity(potential, realized capacities) of startups affect the possibility of startups to overcome the challenges of death valley, and also empirically analyzed whether support of open innovation and venture capital has a moderating influence to the overcoming of death valley. The result of this study shows that customer orientation and realized absorptive capacity have a positive influence on overcoming the death valley. In addition, we found that the support of open innovation and venture capital has a moderating effect only in the technology orientation among the three types of strategic orientations. The result of this research emphasizes (1) the need for startups to take a more customer-oriented approach to overcome the death valley. The customer-oriented behavior and strategies of startups are vital for their longterm survival and success if we consider the fact that most of the companies investigated in this study were technology-based startups and only customer orientation showed significant results in overcoming the death valley. The research outcome also shows that (2) implementing innovation in a more open way and securing venture capital funding can make it easier for startups to overcome the death valley. This study has academic significance in that it empirically analyzed the relationship of key factors influencing the overcoming of death valley in a situation where the majority of existing research remains at the conceptual level of discussion or methodology of case study. Furthermore, this research also provides practical implications for the establishment and implementation of effective strategies to confront the challenges of death valley for startups, government and related organizations.