Any venture is the result of the combination of many different resources and assets. An innovative venture is the result of the encounter of resources such as financial, cognitive (or human), social, scientific, organizational, technological, etc. Success is keeping those resources stuck together, failure is tearing them apart. However, the sort of organizations and the sort of entrepreneurs are not always the same. While the failure rate of venture capital funded startups is high compared with more conservative ventures, literature has shown that the key to success is not only based on the scientific or technical hypotheses supporting a new venture. Depending on their specific characteristics, a similar set of resources can lead to different outcomes.
The aim of this article is to explore the conditions of success by looking at the aggregation or disaggregation of assets in the evolution of Biotech startups. To understand how this complex process evolves, we differentiate between organizational and individual performances.
Inspired by the multilevel social network analysis, this paper explores how the recombination of different kinds of assets is linked to organizational sustainability and to individual staying capacity. As the multilevel social network analyses have shown, the fate of the organization and the fate of the individuals working in those organizations is not always the same. The mechanisms through which organizations capture the benefits of an individual's work, or the mechanisms through which that individual privatizes organizational goods depends on their specific experiences and networks of relationship. Moreover, we claim that, together with the straightforward correlation between organizational and individual performance, the same multilevel configuration can, for instance, lead to organizational sustainability while favoring a weak staying capacity for individuals.
To explore this generic hypothesis, we use a longitudinal social network survey of the Biotech industry in France. Two waves of observations (from 2008 and 2013) allow us to collect information about the venture capital funded Biotech startups and the executives working in them. Using this unique data-set, we define organization performance in terms of organizational sustainability, and we differentiate 5 types, going from remarkable success to failure: going into a public market (IPO), improving the business model, keeping a valuable business model (with high growth potential), lowering the impact of the business model and failure. We conceptualize individual performance in terms of staying capacity and we differentiate 4 different tracks for entrepreneurs: those who maintain their position in the biotech sector but work in another startup, those who keep working in the same Biotech startup, those who stop being an entrepreneur but stay in the Biotech sector, and those who go out of the Biotech sector.
Using these two typologies as dependent variables, we explore, through multinomial regression models, the financial, cognitive (or human) and social conditions of success while differentiating organizational and individual performance. Our research provides an empirical application of the overall theoretical frame of the multilevel social network analysis that aims to disentangle the different levels of agency that drive collective action.