Building capability through networking with investors and researchers: Co-creating financing and innovation in startups

A startup requires financing, typically, and the startup is based on innovation, often. Capabilities for innovation and financing may be built simultaneously and created jointly at inception. Co-creation of capabilities for financing and innovation is accounted for in this study. Co-creation is embedded in the network around the starting entrepreneur, we expect. Co-creation benefits from networking with potential investors and with researchers and inventors, we hypothesize, and especially by networking with both investors and researchers concurrently. Co-creation is analyzed in a sample of startups at inception, by 9,161 entrepreneurs, surveyed in Global Entrepreneurship Monitor in 49 countries. Co-creation is found to be reduced by the entrepreneur’s networking in the private sphere of family and friends, but to be benefiting from networking in the public sphere, especially by networking with investors and researchers simultaneously. The findings contribute to understanding capability building as embedded in networks around the startup.