Entrepreneurial stakeholder enrollment: discriminating alignment under intersubjective uncertainty

Abstract Knightian uncertainty is central to entrepreneurship. While the entrepreneurship literature has carefully investigated the implications of uncertainty for entrepreneurial decision-making, less is known about how uncertainty affects the entrepreneur’s ability to mobilize stakeholders in support of a new venture. Entrepreneurs and potential stakeholders, notably funders, often hold different subjective beliefs about future possibilities and their likelihood, a condition we call intersubjective uncertainty. The extent of intersubjective uncertainty depends on the novelty and opacity of entrepreneurial projects and shapes the financing strategies and outcomes of entrepreneurs in a systematic, discriminating manner. Because some level of agreement is necessary for entrepreneurs and funders to realize gains from trade, entrepreneurial strategies for reducing intersubjective uncertainty are complementary to formal contractual and ownership mechanisms that structure deals between entrepreneurs and funders. We unfold these ideas from the perspectives of new institutional economics and research on entrepreneurial stakeholder enrollment which examines the use of communication and persuasion.