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Entrepreneurial growth actions and their financial consequences in a start-up: insights from a low cost airline venture in a competitive environment

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Listed:
  • Mukund R. Dixit
  • Amit Karna
  • Sunil Sharma

Abstract

This paper investigates the financial consequences of entrepreneurial growth actions in a start-up. It argues that the growth actions in a start-up create an imbalance in the demand for and supply of money for the start-up. This imbalance does not hurt if the external business environment is munificent. However, if the environment turns hostile the imbalance may force the entrepreneur to take crisis decisions that destroy the very texture of the venture. We develop insights into this situation by tracing the development of a low cost airline venture in India. We identify two distinct growth phases: early growth and emergent growth. We present a comparative analysis of these two phases on different parameters: growth actions of the venture, financial consequences, stance of the environment and implications for the texture of the venture. The paper concludes with a discussion on start-up aspirations, growth actions, financial imbalance and maintenance of the texture of the venture.

Suggested Citation

  • Mukund R. Dixit & Amit Karna & Sunil Sharma, 2008. "Entrepreneurial growth actions and their financial consequences in a start-up: insights from a low cost airline venture in a competitive environment," Venture Capital, Taylor & Francis Journals, vol. 11(4), pages 361-378, November.
    • Handle: RePEc:taf:veecee:v:11:y:2008:i:4:p:361-378
    DOI: 10.1080/13691060903184779
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    References listed on IDEAS

    as
    1. Einar Häckner & Robert D. Hisrich, 2001. "Editorial: Contemporary entrepreneurial finance research," Venture Capital, Taylor & Francis Journals, vol. 3(3), pages 183-185, July.
    2. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
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