Networking on Twitter: Entrepreneurs' Quest for Funding

The application of social network theory to the entrepreneurship's field is built around a fundamental understanding: the relationships in which novel entrepreneurs are "embedded" (Granovetter, 1985; Uzzi, 1996) matter for their success (Larson, 1992; Hansen, 1995; Uzzi, 1997). Overwhelming evidence has proven that both structural (Shane and Cable, 2002; Shane and Stuart, 2002; Hsu, 2007) and relational embeddedness (Uzzi, 1999; Hite and Hesterly, 2001; Davidsson and Honig, 2003) affect new ventures' chances to obtain a first round of investment (Hsu, 2007; Colombo and Grilli, 2010), and finally achieve success on the market (Davidsson and Honig, 2003; Bosma et al., 2004). Yet, we still know relatively little about how entrepreneurs can act strategically to leverage, or improve, their network position. Provided that certain network positions, and even ties, are more conducive to the accrual of social capital (Adler and Kwon, 2002), what can entrepreneurs do to reach these positions? Do these strategies afford benefits in terms of founders' likelihood to receive their first investment? And to what extent are different networking strategies effective in combination with different structural positions? These questions are grounded in the long standing debate concerning the relative importance of agency (Emirbayer and Goodwin, 1994) in networks' evolution (Stuart and Sorenson, 2007; Ahuja et al., 2012): in line with a burgeoning, recent stream of literature (Vissa, 2012; Semrau and Sigmund, 2012; Hallen and Eisenhardt, 2012; Bensaou et al., 2014) we take a positive stance with respect to this issue, and proceed to study founders' strategic networking behaviours. More specifically, we tackle the above questions by merging observations of funding events at the company level with the rich, granular data obtainable from online social networks. We built a large, longitudinal sample joining Crunchbase, Linkedin and Twitter data to observe more than ten years of social interactions among a large portion of the most relevant players in the London entrepreneurial field. In this way, we are not only able to reconstruct the network linking these subjects (following a structuralist perspective) but, more importantly, we can also discern qualitative features of their interactions, thus observing their relational embeddedness, and the networking strategies these actors adopt. Hence, we set out to make three main contributions to the literature. First, we propose three active strategies available to entrepreneurs willing to leverage or improve their network position. We define them as "showcasing visibility", "showcasing similarity" and "showcasing competence" and we study their possible effects over the likelihood of receiving funding. The second contribution is to theoretically reconnect static and agentic views of networks: in studying the proposed networking strategies, we explicitly observe them in conjuncture with focal actor's structural position, to explore how they interplay. The final contribution of this work relates to the context in which the phenomenon is investigated. In fact, the largely unexplored study of online social networks opens new avenues for entrepreneurship research: in our case, it grants the unique opportunity to objectively see relationships being formed, evolving and possibly dissolving - with a level of detail and precision that is impossible to achieve offline. Overall, to the best of our knowledge, this is the first quantitative attempt to study the effect of specific strategic networking strategies over the likelihood to receive funding.