FEATURE
PAPER
Entrepreneurial Networking: How Does It Rank?
The
following paper was presented at the 2007 Association of
Small Business and Entrepreneurship (ASBE)
. It was written
by Ken Schallenkamp of Black Hills State University and William
L. Smith of Emporia State University.
Abstract
This paper briefly examines two exploratory studies examining
entrepreneurial networking. We next review the literature on
entrepreneurial networking to summarize the latest research
on the entrepreneurial use of networking. Based on this review,
eight propositions are developed for the purpose of alternative
testing approaches to achieve an increased understanding of
the use networking to entrepreneurs and the benefits there
to. We conclude with a discussion of the research and managerial
implications of our findings.
Introduction
Much of the current literature dealing with entrepreneurism
supports the contention that entrepreneurial networking is
a significant factor in the success of new entrepreneurial
ventures. Nevertheless, two recent empirical exploratory studies
revealed that one set of entrepreneurs as well as one set of
key advisors to entrepreneurs did not rank the importance of
networking to the success of new entrepreneurial ventures very
highly at all.
This paper begins by briefly reviewing the results of these
two exploratory studies of Midwestern entrepreneurs and Small
Business Development Center (SBDC) advisors. We then examine
the literature dealing with the importance of networking relative
to the success of entrepreneurial ventures and propose a series
of propositions that might be used to examine the role of networking
in entrepreneurial development in more depth. Finally, we discuss
alternative ways these propositions might be used to encourage
entrepreneurs and those entities that work with them, to re-consider
the importance of networking.
Read
the Entire Paper...
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OF THE WEEK
Establishing Intent to Enter into a Contract
Some disputes over contractual relationships center on the
question of original intent or even the very existence of
a contract.
Existence of an Agreement and Intent to be Bound Because
an arbitrator or court might later have to determine the
parties’ intentions, it is useful to
have an explicit preamble or statement summarizing the parties’ intentions
(called the recitals) drafted at the time the parties enter into the agreement.
Date It
is important to establish when the meeting of the minds took
place. If the parties
all sign the agreement on
the
same date and want it to be effective
immediately upon signing, then the agreement should provide: “This Agreement
is executed and entered into on [date].” If the parties sign on different
days, then the agreement might provide that it is “made and entered into
as of the later of the two dates on the signature page.” If the agreement
is to be effective as of a date other than the date it is signed, then the agreement
should provide: “This Agreement is executed and entered into as of [date].”
Terms of the Agreement
The following
types of provisions are the heart of the agreement and determine
the parties’ contractual obligations to one another.
Representations and Warranties Any
key assumptions or understandings upon which the agreement
rests should be explicitly stated
as representations and warranties.
For example, “Party A represents and warrants that the hardware when installed
meets the specifications on Schedule A for use in the production of computer
chips.” If such a representation were not included in the contract, Party
A could later claim that it was under the impression that the equipment was to
be installed under less stringent specifications or for a different use.
Representations
and warranties are also used to contractually guarantee that
certain facts are true. For
example, an investor
will want assurance that the
company owns all of its intellectual property and that it is not violating any
other person’s rights. The investors can sue for breach of contract if
it later turns out that someone else-- such as a prior employer of the founder
or a university where the founder was a graduate student—owns key technology.
Conditions The
fulfillment of some contractual obligations may be conditioned
on the occurrence
of certain events (called
condition), such as the approval
of a loan application by a third party, or on the other party’s performance
of a particular obligation to perform under a contract is conditional on the
representations and warranties being true and correct in all material respects.
The only
restriction on the use of conditions is that one party’s obligation
may not be made conditional upon some occurrence exclusively within the control
of that same party. If one party to an agreement had complete control over the
occurrence of a condition, that party’s obligation would effectively be
negated, reducing an otherwise valid contract to an illusory promise.
The condition
should be stated clearly, using simple, straightforward language,
such as “if,” “only if,” “unless and until,” or “provided
that.” For example, a stock purchase agreement will usually include language
to this effect: “The investors shall have no obligation to purchase the
shares and to pay the purchase price unless all conditions set forth in Section
4 are satisfied.”
Logistical Considerations Such details as performance requirements,
delivery and installation instructions, risk of loss allocation,
and the procurement of
insurance should be discussed in advance and included in the written agreement.
Payment Terms Payment
terms should specify both when and in what form payment must
be made.
If payment is to be made
in installments, the seller can attempt
to deter a buyer from missing payments by including an acceleration clause in
the written agreement. An acceleration clause specifies that all remaining installments
(and interest, if applicable) become immediately due and payable if the buyer
is late in paying any installment. Some acceleration clauses take effect automatically
upon default, but in many contracts (especially when long-term relationships
are factor), it may be preferable to make the exercise of the acceleration clause
optional at the creditor’s discretion. Notice and Opportunity to Cure Especially when the evaluation
of performance is subjective, it is helpful to include
a provision requiring written notice
of a failure to comply with the contract and some opportunity to cure the default.
Timing Issues The parties should agree in advance on such
crucial questions as the duration, termination, and renewal
of the contract, as well as specifying
when their obligations to each other must be fulfilled.
Constance
E. Bagley and Craig E Dauchy. The Entrepreneur's Guide
to Business Law, 3rd Edition.Copyright 2008, 2003.Thomas,West,
Pgs. 198- 200. (ISBN: 0-342-20493-3)
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ANNOUNCEMENTS
National
Urban Inititiatives Competition
Clark University
is hosting the National Urban Inititiatives Competition.
They are seeking proposals that have practicality, creativity,
and are well rooted in theory. Proposals should trnslate
from theor to model or vice versa. Furthermore, it should
be feasible to enact into legislation.
An award of $20,000 will be given to each winner of the three categories:
1. Affordable and
sustainable housing.
2. Neighborhood based
economic development.
3. Financial services
to low income communities.
All applicants must
be from a institution of higher education and must team with
one or more of a local government entity and/or non-profit
organization.
Submission of Step
1 proposals are due January 25, 2008.
For more information
please click
here.
SBI
Journal - Request for Papers
The Small Business
Institue is now requesting papers for the Small Business
Institute Journal. If you are interested in submitting a
paper, please let us know. The first issue is to be printed
April 2008. For more information please click
here or email us at sbij@uca.edu.
SBANC is Updating
Their Entrepreneurship and Small Business Network
The Small Business Advancement
National Center is currently updating their Entrepreneurship
and Small Business Network. If you currently teach or know
a professor in your
school or state that teaches an Entrepreneurship or Small
Business course, please provide us with any available information
at sbanc@uca.edu.
We appreciate any help. Thank you.
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