Ecosystem conditions and the efficacy of entrepreneurial support organizations: Moderating effects on venture entry

Abstract

Research Summary Using a panel of 2688 city‐year observations of German fintech ventures and entrepreneurial support organizations (ESOs), we examine how ESO presence relates to venture entry. We argue and demonstrate that this relationship is contingent on local founding conditions. We find that ESO presence is most strongly associated with entry in thin ecosystems, while this association weakens in more active and developed contexts. Patterns in entries of non‐supported versus ESO‐supported ventures, along with differences across ESO types, support our argument that primarily ecosystem‐level bridging mechanisms, such as legitimacy diffusion, knowledge spillovers, and access to relational networks, are sensitive to local conditions, whereas direct support provided by ESOs to program participants is not context‐dependent. Managerial Summary Entrepreneurs, entrepreneurial support organizations (ESOs), and ecosystem builders benefit from understanding the broader economic and entrepreneurial context. In well‐developed ecosystems, informal networks can provide access to knowledge, collaboration opportunities, and legitimacy signals, reducing the marginal contribution of additional ESO presence in the ecosystem. In less‐developed ecosystems, ESOs can support venture formation by bridging entrepreneurs to networks, partners, and markets, and by mitigating resource scarcity and the challenges of newness. Structured programs, targeted mentorship, and guidance can support venture entry across the ecosystem, complementing existing informal networks and addressing gaps where they exist. Our findings suggest that the role and potential impact of ESOs vary with local founding conditions, emphasizing the importance of aligning support mechanisms with ecosystem maturity and structural characteristics.