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The birth of the modern business organization, both as an institutional outcome and a driver of venturing, was a historic economic breakthrough. The modern business organization, however, assumes many forms. Taking into account the heterogeneity of an organization, we may focus on the business lifecycle, which helps us to better understand the different levels of relevance of venturing. As such, we can define four phases of a company lifecycle:

– Formation phase: The initial phase of a company is characterized by opportunity seeking. Creativity is a key capability to help the company develop a viable product and requires capital injections.

– Acceleration phase: Fast growth, entering new markets and capturing market share define the acceleration phase. The company needs to invest in market development to ensure it reaches consumers and clients before potential competitors. As companies at this stage often lose money, they are still owned by private investors.

– Consolidation phase: Once an organization is established and operates in a well-defined industry, the focus shifts to increasing efficiency and effectiveness to preserve its position. The same optimization focus is applied to the capital structure.

– [16] Energization phase: As industries evolve, every business reaches the point where it needs to re-invent itself to ensure the industry-solution fit. It needs to re-discover opportunities by forgetting and learning, which requires preservation and re-creation of capital.

Exhibit 3: FACE lifecycle (Hilb 2014, facelifecycle.com)

Venturing can be seen as one of three dominant paradigms for organizing a business, as defined by Hilb and Casas (2015). In contrast to managing and administrating, venturing focuses on creating absolute value beyond existing industry boundaries, while management revolves around protecting absolute value by creating relative value, i.e. gaining market share. The administrative paradigm, on the other hand, concentrates on protecting relative value, which equals absolute value due to a lack of competition.

Hence, venturing can occur in all lifecycle stages, although its relevance, scope and scale may differ – as will the requirements for effective governance:

– Formation phase: Almost all company activities in the formation phase center around venturing, i.e. creating value by identifying and capturing new opportunities. This phase defines the culture as well as the capabilities needed to succeed. In this context, the main objective of effective governance is to ensure survival by facilitating entrepreneurial freedom while maintaining compliance with relevant legal requirements.

– Acceleration phase: While venturing is still a dominant paradigm in the acceleration phase, the managerial paradigm gains extra relevance, i.e. how to create value within pre-defined boundaries. At this juncture, the role of governance is mainly to facilitate fast growth, but also to professionalize the governance structures.

– Consolidation phase: Venturing is least relevant in the consolidation phase. Managerial or even administrative paradigms prevail as organizations [17] adapt and formalize their governance systems to meet the complexities of large and often inter-twined operations.

– Energization phase: The venturing paradigm gains in relevance in the energization phase, as value protection is not deemed sufficient to survive. Once again, venturing becomes a source for survival of the organization, and governance structures need to provide sufficient flexibility.

Exhibit 4: Relevance of venturing in the FACE lifecycle (Hilb 2014, facelifecycle.com)

Venturing is crucial in all stages of a company’s evolution. The strategic role and governance requirements may, however, change throughout the lifecycle.