Entrepreneurship and social network development

This study examined how entrepreneurs’ social networks develop during the entrepreneurial process from the start-up initiative to the operations of an established business. Random samples of entrepreneurs in different stages of the entrepreneurial process were identified through the Danish GEM (Global Entrepreneurship Monitor) and their social networks were statistically analysed. It was found that entrepreneurs’ social networks in the emergence stage are more convergent – small, close and dense – compared to entrepreneurs’ social networks in later stages of the entrepreneurial process. Convergent networks support activities and decisions about testing and exploiting given directions, implementing strategies, creating internal consensus and maintaining relationships in established networks. As entrepreneurs move forward in the entrepreneurial process, their social networks become more divergent – they become more extensive and diverse, with many structural holes. Divergent networks support activities and decisions associated with exploring and expansion in different directions, creating ideas and strategies, and building relationships.