The creation of opportunity is an opportunity to create: Entrepreneurship as an outlet for the legacy motive

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Abstract

As evidence has accumulated that entrepreneurs may pay a financial penalty for their career choice, researchers have struggled to explain the motivation that might lead individuals to pursue the creation of new firms, technologies, and opportunities. We introduce the desire to leave a legacy as both a common source of motivation for many entrepreneurs, and a source of variation, as entrepreneurs who wish to leave a legacy must decide what they would like to leave behind, and whom they wish to benefit from that act. We discuss the implications of the different kinds of legacies for entrepreneurs and their organizations, particularly at founding and exit, when the legacy motive is likely to be particularly salient.

Section snippets

Defining legacy

We define legacy as an enduring meaning, connected to the identity of an individual actor, apparent in behaviors that are intended to have an impact after the actor is gone. This definition, which is rooted in work on intergenerational decision-making (e.g. Wade-Benzoni & Tost, 2009), is central to understanding the phenomenon of the legacy motive as it relates to entrepreneurship, and distinguishes our use of the term from research using the same word to examine phenomena that fall outside the

Legacy salience and entrepreneurship

Research on the legacy motive and entrepreneurship has existed largely in parallel, despite strong hints in both lines of research that the two are linked. Social psychologists studying generativity and symbolic immortality have often argued that the creation of new products and organizations could be an outlet for the desire to make a lasting impact (Erikson, 1968, Kotre, 1984, McAdams and De St. Aubin, 1992), but have tended to mention these links in passing, rather than developing theory

Entrepreneurship and legacy content

In light of this evidence of the importance of the legacy motive to entrepreneurs, why has this link gone unexplored for so long? One explanation may be that when entrepreneurs start new firms as a way to make a lasting impact, divergent preferences regarding the nature of the desired legacy engender differences in the choices that entrepreneurs make across the life of the venture. Social entrepreneurs may have different ideas about what an appropriate lasting impact is when compared with

Implications of legacy complexity at founding and exit

Having shown the importance of the legacy motive to entrepreneurs and laying out the different kinds of legacies that they may wish to leave, we turn now to the critical decisions entrepreneurs make throughout the life of their firms. We focus on how the legacy motive affects entrepreneurial decision making at founding and exit. Not only are these decision points critical to the ongoing viability of a new firm, but as noted above, the legacy motive is likely to be particularly salient at these

Discussion and conclusion

Our reason for starting this company wasn’t money. It wasn’t that we wanted to start a company and retire. We wanted to work for ourselves and create a great work environment, have fun, and if we can create something of lasting value, great. I’m not saying money doesn’t matter, but it’s not the most important thing. (Executive of acquired startup, from Graebner, 2009)

The above quote illustrates the enduring challenge of understanding founders’ motives, as well as the critical importance of

Conclusion

The persistence of entrepreneurs in the face of long odds, long hours, and more often than not, reduced financial compensation has led to a renewed interest in understanding the non-pecuniary sources of motivation for entrepreneurs. By expanding our understanding of the legacy motive to include not only the extent of the desire to make a lasting impact, but also the intended benefits and beneficiaries of that act, we provide a framework that explains both the link between the legacy motive and

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