The Effects of Business Failure Experience on Successive Entrepreneurial Engagements: An Evolutionary Phase Model

Abstract

This study draws insights from the literatures on entrepreneurial learning from failure and organizational imprinting to develop an evolutionary phase model to explain how prior business failure experience influences successive newly started businesses. Using multiple case studies of entrepreneurs located in an institutionally developing society in Sub-Sahara Africa, we uncover four distinctive phases of postentrepreneurial business failure: grief and despair, transition, formation, and legacy phases. We find that while the grieving and transition phases entailed processes of reflecting and learning lessons from the business failure experiences, the formation and legacy phases involve processes of imprinting entrepreneurs’ experiential knowledge on their successive new start-up firms. We conclude by outlining a number of fruitful avenues for future research.