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Timing the Leap: A Real Options Analysis of First-Time Lobbying by Entrepreneurial Ventures
Abstract   Open access

Timing the Leap: A Real Options Analysis of First-Time Lobbying by Entrepreneurial Ventures

Miranda J. Welbourne Eleazar, Jinsil Kim and Seung-Hyun (Sean) Lee
Academy of Management Annual Meeting Proceedings, Vol.2026(1)
07/2026
DOI: 10.5465/AMPROC.2026.13597abstract
url
https://doi.org/10.5465/AMPROC.2026.13597abstractView
Published (Version of record) Open Access

Abstract

Entrepreneurial new ventures must make the most of their inherently uncertain regulatory environment with limited resources. Although venture capital funded entrepreneurial ventures with little experience with non-market strategies may be tempted to devote resources toward market-based proven “safer” bets, allocating resources toward more uncertain non-market strategies may offer substantial payoffs for the ventures. We take a real options perspective to address the question: what makes ventures decide to devote valuable resources toward non-market strategies in the form of lobbying earlier, shortening the time to first-time lobbying? We develop an Entrepreneurial Lobbying Option framework, in which we theorize that more market options directly related to economic exchange (such as patents), or threats to market options (such as lawsuits), can spur new ventures to more quickly recognize the need to obtain a non-market option through engagement with political actors in the form of lobbying. We further theorize that this effect is facilitated through knowledge transfer from venture capitalists with lobbying experience. We find support for our hypotheses, contributing to the literature on entrepreneurship, real options, and lobbying.

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