We present evidence suggesting that geographic and industry spaces represent natural boundaries that contain the transmission of information about potential investment opportunities. After establishing this finding, the majority of our empirical analyses document that the social networks in the venture capital community built up through the industry s extensive use of syndicated investing facilitate the diffusion of information across geographic and industry boundaries and therefore expand the spatial radius of exchange. We show that VCs that build axial positions in the industry's co-investment network can obtain information from distant sources and hence expand the scope of their investments over time. Consistent with the sociologist s general view of markets, variation across actors in their positioning within the structure of a market appears to differentiate market participants in their ability to overcome boundaries that otherwise would curtail exchange. Evidence from Biotech Strategic Alliances .
Strategic alliances are commonplace in the biotechnology sector.
The results establish that the alliance network mitigates holdup problems in interfirm transactions. The question of how initial resource endowments the stocks of resources that entrepreneurs contribute to their new ventures at the time of founding affect organizational life chances is one of significant interest in organizational ecology, evolutionary theory, and entrepreneurship research. Our analysis focuses on the role of founders social capital as a determinant of these outcomes. Event history analyses show that new ventures with founders having direct and indirect relationships with venture investors are more likely to receive venture funding and are less likely to fail. We conclude that the social capital of company founders represents an important endowment for early-stage organizations.