Patch or pursue? the role of regulatory focus in social capital aspects of the reentry decision

This paper explores the role of regulatory focus in the social capital aspects of the reentry decision. Whereas prior research has focused on the evolution of social capital through the lifespan of a venture, this paper focuses on self-regulated shifts in social capital that occur during the afterlife of a failed venture. Building upon social capital and regulatory focus theories, the main proposition in this paper is that failure triggers self-reflective and reactive cognitive processes that motivate failed entrepreneurs to actively manage their social capital portfolio. Promotion focused entrepreneurial leaders are proposed to more likely to pursue structural shifts in social capital. Prevention focused entrepreneurial leaders are proposed to be more likely to patch and preserve the social capital embedded in failed ventures. The paper concludes that the lessons learned from prior failure experiences not only shape entrepreneurial intentions for social capital exchanges in future ventures but also may provide insight into heterogeneous means for value maximizing combinations of social assets and liabilities that are a regulatory fit to the outcomes that entrepreneurs expect.