Who Matters After Fundraising? Empirical Examination of Venture Survival in the Blockchain Ecosystem

Grau, Caroline V.; Schulz, Colin; Bendig, David; Brettel, Malte

Abstract

In digital entrepreneurship, the boundaries between young ventures and their surroundings are blurring. Digital startups face distributed entrepreneurial agency when involving third-party groups (i.e., individuals, crowd, and firms) in shared value creation processes. To date, research on third-party support focuses on the funding stage, and insights on performance determinants beyond fundraising are scarce. This study empirically investigates the relationship between different types of third-party support and digital venture survival in the blockchain ecosystem. Based on a unique, large-scale dataset of 1,677 digital ventures that conducted an initial coin offering (ICO) before July 2018, we show that professional advisor support is related to increased survival probability. Furthermore, involving crowd programmers and board interlocks are relevant determinants of digital venture survival. For board interlocks, we hypothesize and find support for an inverted U-shaped relationship with performance. Finally, we discuss implications for founders and investors and open new research avenues for IS research.