Means and Extremes: Reinterpreting the Relationship Between Resources and New Venture Performance

Empirical work examining firm performance often focuses on average outcomes. While a growing collection of conceptual and empirical work in strategy has demonstrated the utility of methods that tease out nuance in firm performance, less attention has been paid in entrepreneurship to these advances. This study demonstrates the insights that can be evoked through the study of outcome variability through an empirical an empirical example in entrepreneurship--the differential effect of human and financial capital--two crucial resources for entrepreneurial firms--on new venture performance, using a panel dataset of 4928 new firms over their first four years. Our results reveal surprising relationships between resources and new venture performance, and the advantages of looking beyond the mean, to the extremes, to better understand entrepreneurial firm formation and growth.