#4656. Venture distress and problemistic search among entrepreneurs in Brazilian favelas

July 2026publication date
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Journal’s subject area:
Business and International Management;
Management of Technology and Innovation;
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Abstract:
Problemistic search theory suggests that entrepreneurs will seek out sponsors in moments of venture distress. However, this theory was developed in the context of large organizations; it is not clear how it might apply to entrepreneurs in resource-constrained contexts. We use three inductive studies conducted to examine when entrepreneurs seek help. We also explore what types of entrepreneurs are most likely to seek help in a situation of venture distress and find that entrepreneurs who are more socially embedded and have more social obligations are more likely to take up sponsorship services, leading to important heterogeneity in our results on take-up. We find that women, more mature ventures, and middle-aged entrepreneurs are all more likely to engage in problemistic search. We also provide important theoretical and practical insights about the demand-side of organizational sponsorship.
Keywords:
Emerging economies; Failure; Help seeking; Organizational sponsorship; Problemistic search; Venture distress

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