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Straight talk for startups 100 insider rules for beating the odds from mastering the fundamentals to selecting investors fundraising managing boards and achieving liquidity Komisar
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Preface
Das Themenfindung für die vorliegende Dissertation wurde maßgeblich beeinflusst durch ein Praxisprojekt während meiner Zeit als Wissenschaftlicher Mitarbeiter am Stiftungsfonds Deutsche Bank Lehrstuhl für Innovationsmanagement und Entrepreneurship. Die hohe praktische Relevanz des Themas und die Lücke in der akademischen Literatur motivierten mich zur Anfertigung der Arbeit. Mein Dank gilt daher zunächst Markus H. Michalow als Initiator dieses Praxisprojekts sowie der gesamten HHL-Community und dem Gründernetzwerk SMILE, welche mein Interesse am Thema Unternehmertum erst richtig weckten.
Ich bedanke mich bei meinem akademischen Betreuer und Lehrstuhlinhaber Professor Dr. Andreas Pinkwart nicht nur für die Betreuung und die hilfreichen Hinweise zur Anfertigung dieser Arbeit, sondern auch für das Vertrauen, welches mir in verschiedenen anderen Projekten am Lehrstuhl und darüber hinaus zu Teil wurde.
Weiterhin insbesondere danke ich insbesondere Vivek Velamuri, Christian Comberg und Philipp Veit für den akademischen Austausch sowie meinen Lehrstuhlkollegen
Franziska Greim, Anja Hagedorn und Dorian Proksch für die moralische, inhaltliche und adminstrative Unterstützung. Die wertvolle und enge Zusammenarbeit mit den studentischen Hilfskräften des Lehrstuhls, insbesondere Alice Riedel und Lars Radscheidt, leistete dankenswerterweise einen wichtigen Beitrag zu dieser Dissertation. Ebenso mein Korrekturleser Stewart Tunnicliff.
Den größten Anteil an der Fertigstellung dieser Arbeit hat jedoch meine liebe Frau Anne Weber, welche mich während der Promotion immer angetrieben und motiviert hat sowie oft großes Verständnis für meine zeitlichen Verpflichtungen aufbringen musste. Danke!
Herzlichen Dank auch für die Unterstützung meiner Eltern.
II List of figures
Figure 1: Focus area of the thesis........................................................................12
Figure 3: Governing board roles in different phases of entrepreneurial development.........................................................................................................72
Figure 5: Overview of grounded theory process as adopted in the current study.96
Figure 6: Adaption of theoretical approaches to explain AB roles......................133
Figure 7: Proposed model to investigate AB roles..............................................135
Figure 8: Sample cases by type, by industry and with/without VC.....................155
Figure 9: Cases by number of employees and sales volume.............................155
Figure 10: Cases by firm age .............................................................................156
Figure 11: Occassion for establishing ABs.........................................................157
Figure 12: Institutionalization of ABs ..................................................................158
Figure 13: Origin of AB members .......................................................................159
Figure 14: Importance of AB roles ......................................................................160
Figure 15: Drawbacks of ABs .............................................................................161
III List of tables
Table
Table
Table
Table
Table
IV Abbreviations
AB Advisory board
BOD Board of Directors
CEO Chief Executive Officer
COO Chief Operating Officer
CTO Chief Technology Officer
D&O Directors and Officers
DCGK German Corporate Governance Code
EU European Union
GEM Global Entrepreneurship Monitor
ICR Intercoder Reliability
ICT Information and Communication Technology
IPO Initial Public Offering
KPI Key Performance Indicator
LLC Limited Liability Corporation
NTBF Newly-founded Technology-Based Firms
NYSE New York Stock Exchange
OECD Organisation of Economic Co-operation and Development
SB Supervisory Board
SME Small- and Medium-sized Enterprise
SOX Sarbanes-Oxley Act
US United States (of America)
VC Venture Capital
VCs Venture Capitalists or Venture Capital Funds
VIF Variance Inflation Factors
1 Introduction
1.1 The underlying problems of startups
The underlying problem of this study is that many young and innovative companies fail and become bankrupt within their first years. This has been empirically proven by many different research studies on entrepreneurship such as the Global Entrepreneurship Monitor (GEM) Germany (Sternberg/Vorderwülbecke/Brixy 2014) or the ‘KfW -Gründungsmonitor 2014’ (Metzger 2014) . It is clear that many young companies fail within the first few years after they are founded. According to the GEM the fear of failing in Germany is much higher than in other developed countries, significantly harming entrepreneurial activities. Ripsas/Tröger (2015) estimate that nearly one third of the newly founded companies in Germany stop their business within the first three years due to different reasons such as deficient liquidity, unforeseen imponderabilities in technology development or conflicts within the founding team. However, such a high failure rate is not only a special problem in Germany, but it can be confirmed worldwide (Wilson/Wright/Altanlar 2014) and therefore it is widely accepted in entrepreneurship research that failure and entrepreneurial activity are affiliated to each other. Thus, starting a new company is a problem of risk allocation and risk management (Pinkwart 2002). New venture creation seems to be a complex process under special conditions, embedded into social structures within a surrounding network of interactors such as founders, investors, employees, customers and many more (e.g. Stinchcombe 1965, Larsen/Starr 1993, Busenitz/Barney 1997, Greve/Salaff 2003). Compared to market incumbents with a significantly smaller failure rate, new ventures face several disadvantages or liabilities. According to transaction cost theory by Williamson (1985) startups face higher monetary or non-monetary transaction costs than established companies when they are engaged in exchanges (Pinkwart 2002). Since business entities are selfinterested as well as opportunistic and rationality is bounded, implicit or explicit contracts are necessary to define the transaction and this can cause initiation costs, bargaining costs, handling costs, enforcement costs and adaption costs. Among others, uncertainty and specificity are important factors that moderate the costs
E. Weber, Advisory Boards in Startups, DOI 10.1007/978-3-658-15340-3_1
caused by a transaction. Due to the usually higher levels of uncertainty and specificity in young startups, they have to cope with higher transaction costs and benefit from mechanisms that reduce these.
Under the umbrella of the well-known term ‘liabilities of newness’ Stinchcombe (1965) subsumes four different aspects, which may lead to higher death rates of newly founded firms. First of all, in new companies all team members have to define their individual roles. It is costly to establish new roles, including different responsibilities, tasks and relations, while the learning capacity of individuals is limited and additionally no one can provide guidance. Also the entrepreneurs themselves have to legitimize their new role within this social system by conforming existing images or stereotypes, by positioning themselves through the purposeful selection of ideas, team members and goals and by defining their own rights and duties (Middleton 2012). Secondly, the invention of those roles is restricted by creativity, capital and time constraints. Very often this process creates temporary inefficiencies, which can only be solved if new team members take responsibility instead of being followers. Thirdly, in new organizations team members need to rely on strangers, since it takes time to establish relationships of trust. In many cultures, individuals may feel traditionally unfamiliar with this. Lastly, young firms have to create new network ties with potential customers, suppliers and partners, which again requires time and resources. As an unknown, new market entrant they have no legitimacy. All of these aspects are linked with a high level of uncertainty, especially in knowledge-intensive businesses, because entrepreneurs have no information about historical trends, market reactions, past performances or routines (Busenitz/Barney 1997, Penrose 1995, Erakovic/Tchaka 2010). Although uncertainty can be reduced by gathering more information or by adding additional members to the founding team (increasing the combined area of competence), there is always some unavoidable uncertainty when remedies become too expensive, timeconsuming or are simply not available (Penrose 1995). Therefore, entrepreneurs need to be risk takers, with a tolerance of ambiguity (acceptance of situations with unclear outcomes), an internal locus of control (believe that their own actions directly influence outcomes) and self-efficacy (Shane/Locke/Collins 2003). This allows them to rely on decision-making biases and heuristics like intuitive decision-making,
overconfidence or representativeness, when complexity and uncertainty grows (Van Gelderen/Frese/ Thurik 2000, Van den Heuvel/Van Gils/Voordeckers 2006). At the same time those behavioral patterns create a high risk of failure, which increases the likelihood of failure. As a result of those liabilities of newness, a higher proportion of young companies fail compared to established companies (Freeman/Carroll/Hannan 1983).
Brüderl/Schüssler (1990) found a non-linear relationship between firm age and mortality. The death rate in an early phase of development is very low, since the company lives from initial resources and entrepreneurs exhaustively monitor performance and hesitate to give a final judgment by abandoning the premature business. Later on, if initial resources are consumed and heavy monitoring stops, startups fall victim of typical failure, which increases mortality. Therefore, this effect is called liabilities of adolescence (Brüderl/Schüssler 1990).
The length of the adolescent phase increases with the size of the initial resource input. This also confirms the liability of smallness approach, which says that limited financial and human resources of new ventures lead to a higher sensitivity to crisis, lower market power and in consequence to higher mortality (Freeman/Carroll/Hannan 1983, Brüderl/Schüssler 1990, Pinkwart 2002). Following Barney (1991) “firm resources include all assets, capabilities, organizational processes, firm attributes, information, knowledge, etc. controlled by a firm that enable the firm to conceive of and implement strategies that improve its efficiency and effectiveness” (Barney 1991, p. 101). From a strategic perspective the usefulness of resources is determined by their value to a company, their rareness on the market, their imperfect imitability and their imperfect substitutability (Barney 1991). With physical capital resources (including technology, equipment, plants and access to raw materials), human capital resources (including training, experience, judgment, intelligence and relationships of individuals involved in a company) and organizational resources (including formal structures, planning methods, monitoring and coordination systems and intra- and inter-organizational network ties) he distinguishes three different types of resources that are necessary to implement strategies to create value and thus to achieve competitive advantages. Due to these
liabilities of smallness, young firms do not have a buffer to react to market contradictions (Clarysee/Knockaert/Lockett 2007).
If startups begin to internationalize very early, they additionally face liabilities of foreignness in their international markets resulting from additional costs of managing an unfamiliar environment with cultural, political and economic differences and the need to coordinate their business over long distances (Zaheer 1995). To overcome those liabilities of foreignness new ventures need to spend more resources, which is in conflict with the liabilities of smallness they need to nevertheless conquer.
Furthermore, growth and survival in small businesses are dependent on the amount of available resources, since a firm can be described as an assembly of different resources, with managerial capabilities among the most important (Penrose 1995). Managerial capabilities are “the bundles of complementary resources ... administrative skills, routines, and physical assets with the flexibility to generate adaptive and valuable inputs ” (Miller 2003, p. 964). Based on a literature review Barbero/Casillas/Feldman (2011) distinguish between four different types of managerial capabilities:
- Human resources capabilities, which include functions such as selecting team members, establishing incentive and compensation structures and training options, attracting other executives and board members.
- Organizational capabilities, which contain the establishment of organizational models and professional management methods, such as mission, vision, clear objectives, strong leadership structures, task delegation or control mechanisms.
- Marketing capabilities, which allow using customer knowledge for a market oriented search of growth and differentiation opportunities, which are necessary for product improvements or new product development, sales and marketing strategies and many other activities.
- Financial capabilities that include cash-flow management, financial reporting, financial resource acquisition, cost control and monitoring. While entrepreneurial teams and small businesses usually possess some resources like knowledge, experiences and motivation, they miss most others, especially capital resources and organizational resources and due to time constraints they have to
acquire them externally (Stubner/Wulf/Hungenberg 2007). Especially in high-tech industries the internal supply with managerial capabilities as well as financial and non-financial resources is insufficient in most cases, causing an increased dependence on access to external resouces (Colombo/Croce/Murtinu 2014). Contrary to some previous studies, the relationship between access to external resources and growth is not linear or causal, since the successful exploitation of external resources is limited to sufficient managerial capabilities and long term interorganizational relationships (Furlan/Grandinetti/ Paggiaro 2013). In other words, even if a new venture has sufficient access to resources, sustainable growth will not automatically be the outcome, since growth is a process that needs managerial capabilities to manage external relationships and collaboration over time. Thus, these managerial capabilities of entrepreneurs limit new venture growth and therefore growth and survival can be seen as a function of the ability, management knowledge and skills and aspiration of business managers (Wiklund/Shepherd 2003, Gibb/Dyer 2007, Colombo/Croce/Murtinu 2014).
Unfortunately, the high dependence of firm success on managerial capabilities could overexert the real prerequisites of many entrepreneurs. An empirical investigation Feltham/Feltham/Barnett (2004) revealed that 75 percent of small family business owners feel that their company is either dependent or very dependent on them as individuals. If this self-evaluation might be considered biased due to claims of good governance, in reality this dependence may be even bigger, especially in young firms with liabilities of newness. But during the early phase of entrepreneurial development managerial capabilities of founders face cognitive limits (Penrose 1995, van Gelderen/Frese/Thurik 2000, Feltham/Feltham/Barnett 2004, Stubner/Wulf/ Hungenberg 2007, Kor/Misangyi 2008), which increase failure rate and mortality. Besides limited managerial capabilities, entrepreneurs are confronted with time constraints, which empirically lead to the fact that 65 percent of small business CEOs had to take decisions in at least three of five major functional areas (Feltham/Feltham/Barnett 2004). Founding a company needs a big personal sacrifice of time, which also has huge impacts on the family life of entrepreneurs which may, in some cases, reduce the available time budgets further (Höppner 2006). The great
dependence on managerial capabilities of the founding team, which are undeniably limited, is an additional reason for the high death rates of new ventures.
At the same time, during the entrepreneurial process, there is no stable requirement of managerial capabilities, since corporate objectives and demands change. Some scholars refer to this as ‘dynamic capabilities’. Hence, growth is an ongoing and uncertain process of adjusting available technological and managerial capabilitieswhich become inadequate - and creating new superior ones. Even if a company survives the aforementioned liabilities of the early phases, this transitional process raises the demand for new capabilities, suitable to handling the upcoming opportunities and threats (Zahra/Filatotchev 2004). As an example, decision-making mainly based on overconfidence and representativeness or other biases or heuristics is beneficial in the early phases, but it is not becoming more sophisticated in later, more mature, phases of venture development (Busenitz/Barney 1997). Also the corporate governance requirements are changing during the transition from an entrepreneurial to an adolescent firm (Wirtz 2011). Thus, Mintzberg/Waters (1990) confirmed in a longitudinal case study that structures and strategies were elaborated and standardized with the growing age and size of a company. Again, this was not a linear development, but an unsteady repetition of expansion (entrepreneurial, risktaking mode, spending resources) and consolidation (planning mode, setting and reassessing strategies) cycles. Those strategies are related to different managerial capabilities with a need for a “strategic fit”, which means that the chosen strateg y is consistent with available managerial capabilities (Barbero/Casillas/Feldman 2011). While marketing and financial capabilities are important for both market expansion and product innovation, which are major obstacles in early phases, human resources capabilities are a central need for product innovation, but not crucial for market expansion. The authors found no differences for organizational capabilities and thus they concluded that there is a general importance of those capabilities regardless of the chosen strategy.
Altogether, higher transaction costs, liabilities of newness and adolescence, liabilities of smallness and foreignness for international new ventures, as well as boundaries of managerial capabilities limit growth and therefore cause high death rates of new ventures. And if a young firm survives successfully, growth itself leads to a changed
demand of managerial capabilities. This problem is a crucial concept in entrepreneurship research that often tries to analyze the reasons why many young companies fail (e.g. Gibb Dyer/Ross 2007, ZEW 2010), which factors and resources influence failure, success or growth (e.g. Barney 1991, Penrose 1995) and which personality traits are important (e.g. Boyd/Vozikis 1994). 1 Compared to a relatively intensive study of problems and the status quo, which gained much attention in recent years, potential instruments and ways to solve the problem have often been disregarded. However, there are also widespread solutions in different fields. For example, newly developed management approaches for young firms such as the lean startup model (Ries 2010) or the business model canvas (Osterwalder/Pigneur 2010) might help entrepreneurs to solve problems of complexity and help to avoid risks and thus they have gained popularity in the last years.
More research should be dedicated to those instruments that support entrepreneurs and help to reduce the high failure rates. Entrepreneurs have several possibilities to compensate these discussed liabilities, particularly those that refer to limited managerial capabilities, taking changing demands during the entrepreneurial process into account. On the one hand they could improve their own set of capabilities internally by developing them through training or further education as well as by enlarging the founding team or employing key staff members. On the other hand entrepreneurs could utilize external sources such as different kinds of advisors, who are not directly involved in the business.
Alternatives to increasing managerial capabilities internally seem especially to be rather limited. In the short-term it is not feasible to create additional knowledge or to develop many new capabilities, since the individual learning capacity (‘absorptive capacity’) is restricted (Zahra/Filatotch ev 2004). Hence, as Zahra/Filatotchev (2004) argue, companies need a strategic flexibility and innovation culture to allow organizational learning as well as benefitting from an integration of externals as team members or employees or by building network ties. But it is also especially complicated in new ventures to acquire additional managerial capabilities on the
1 A comprehensive analysis of the development of entrepreneurship research has been published by Landström/Benner (2010) and Landström/Harirchi/Aström (2012).
market due to restrictions of financial resources and time, necessary for the integration of new members (Penrose 1995). One other obvious alternative is to form as diverse teams as it is possible with a suitable number of team members, since this increases the availability and range of cumulated capabilities and experiences (Penrose 1995, Minichilli/Hansen 2007). Also Wirtz (2011) argues the heterogeneity of the top management team supports growth, as long as it adds a certain level of “constructive” conflict. Contributing to these findings Colombo/Croce/Murtinu (2014) observed, that a higher number of owner-managers2 increases firm performance, because it provides an enlarged level of resources and competences without increased coordination costs (horizontal agency costs), since all actors have a comparable level of involvement and thus similar intentions. However, this possibility is restricted by business needs such as a manageable ownership structure, limited resources necessary for integrating additional managers and disadvantages in social interactions within teams that are too large. The likelihood of conflict in larger teams increases, while the level of trust may decrease with heterogeneity and the size of the managing team (Minichilli/Hansen 2007). Additionally, the more complex the managerial team becomes, the higher is the share of time required for coordination and this reduces the given amount of time for integrating new team members or developing individual capabilities (Penrose 1995). While experience and routine will increase managerial capabilities over time, improvements may be necessary in the short-term, due to the indispensable flexibility required especially in highly uncertain, but complex high-tech startup environments. If the entrepreneurial process negatively raises the demand of additional managerial capabilities, it may become crucial to exploit external sources.
Therefore, it is widely accepted that entrepreneurs need external support in general and some kind of advice in particular, according to their individual configuration, type and the status of their company and growth rates (Robson/Bennett 2000, Grundei/Talaulicar 2002, Minichilli/Hansen 2007, Kor/Misangyi 2008, Viljamaa 2011, Furlan/Grandinetti/Paggiaro 2013). While internal managerial capabilities might be sufficient during the early phases, in the long-term outsiders become more and more important to fulfil changing demands of growing ventures. Flexibility and self-
2 Per definition these are shareholders that are actively involved in the management.
containment are very important during the early phases of a venture, but growth leads to higher complexity, making outside support essential (Fox 1982, Jonovic 1989, Daily/Dalton 1992). Also increasingly knowledge-intensive, competitive and rapidly changing startup environments with shorter technology cycles force companies to be proactive, entrepreneurial, innovative, and risk-accepting (Gabrielsson 2007), causing the positive influence of external expertise in contributing to venture creation, development and survival (Viljamaa 2011). Due to the great potential value of external advice many companies use different types of advisors and the most trusted ones can become very influential with a huge impact on the development of the firm based on either direct (advising) processes as well as more subtle processes (Strike 2013).
At the same time research based on small- and medium-sized companies (SME) revealed a general reluctance of small-business managers to use external advisors, since they are afraid to invest scarce financial resources or time capacities, they are not aware of the need or see the danger to loose control or confidential information (Sharma/Chrisman/Chua 1997, Bennett/Smith 2004, Gibb Dyer/Ross 2007, Viljamaa 2011, Strike 2012). Especially during very early phases of venture development, when founders own a high percentage of shares, they may have comparable attitudes.
Entrepreneurs can choose between various types of external support with different types of relationships. While some relationships might be based on contractual agreements, others are entirely informal. Strike (2012) distinguishes between formal advisors, who are either employed or partially own a company or are hired experts and informal advisors, who are informally engaged, often with a personal relation to managers.
According to Robson/Bennett (2000) the most important sources for external support in SMEs are accountants, lawyers/attorneys, bankers, friends and relatives, customers and suppliers, consultants, chambers and associations, local enterprise and public sector agencies. In addition, Höppner (2006) adds universities and the internet as other sources for external advice. Another important source of external advice can be Venture Capitalists (VCs) if they are invested in a company (Rosenstein et al. 1993). While accountants (Gooderham et al. 2004) and banks
(Han et al. 2014) are used by a majority of small firms, other kinds of advisors are consulted less frequently. Generally it seems that the smaller the company, the less likely it is to use professional external advisors. Accordingly, asking friends and relatives is typically done in early phases of venture development, which indicates the importance of low costs and trusted feedback during this stage (Robson/Bennett 2000, Shaw 2006). Later on, asking banks not only for money, but also for support in financial questions is usual and it reduces the risk of financial problems, while trust and embeddedness of bank consultants deepen over time (Han et al. 2014). Public sector agencies offer assistance programs and are popular especially in rural areas, although there are matching problems between service providers and demand (Schwartz/Bar-El 2004) and it was empirically analyzed that users of public sources tend to be less profitable (Robson/Bennett 2000) and satisfied with the performance (Gooderham et al. 2004). However, possible reasons could be that profitable and successful new ventures need fewer advisors or they simply use other, more specialized sources, because they can afford it. With this broad range of various alternatives in mind, many entrepreneurs use different sources of advice to benefit from the combined level of expertise (Robson/Bennett 2000, Horan 2003, Gibb Dyer/Ross 2007).
As an additional opportunity entrepreneurs can use different kinds of governing boards such as boards of directors (BOD), supervisory boards (SB) or advisory boards (AB), depending on the legal framework (see chapter 2.2).3 Corporate governance is heavily influenced by legal frameworks and with unified or one-tier corporate governance systems and separated two-tier corporate governance systems there are two dominent fundamental approaches with different adaptions worldwide. While management and supervision are unified in one board, usually called BOD, in one-tier systems, they are strictly separated in two-tier systems as a ‘management board’ and a SB (Mallin 2010).
However, in both systems many young and old companies use ABs, which can be designed according to the current needs of a company without many legal
3 See chapter 2 for detailed definitions. This study excludes ABs as a marketing-related instrument as described by Marshall/Heffes (2003), Fawcett et al. (2006), Carter (2008) or Drew (2012).
restrictions, and therefore suitable to being used as a corporate governance tool in dynamic entrepreneurial environments (Merkel/Posner 2002, Bygrave/Zacharikis 2014). Besides other roles4 and functions they can be understood as an internal opportunity to expand managerial capabilities (Hsiao/Brown 2009). At the same time, most kinds of governing boards usually include a more or less high share of outside members, who add external expertise and resources to a company. Aronoff/Ward (2011) claim external advisors are no substitution for active governing boards with outsider involvement, because the relationship with external advisors is closer to an employee relationship. While governing board members are usually respected individuals and role-models for managers, external advisors are fostered to be impartial, objective and clear and they have the purpose to earn money and usually they do not attend governing board meetings. Vice versa it can be argued that ABs are not a substitution for consultants, because they might provide strategic advice during decision processes on a managerial level based on their experiences, but time constraints prevent them from gaining a sufficient level of know-how to concretely solve single problems like consultants can on a more operative level (Klaus 1991). In most cases ABs and external consultants have a rather complementary role. Therefore, in the perspective of founders governing boards including ABs are an additional, but not exclusive opportunity to increase managerial capabilities, especially in important fields such as control, strategy setting and investor relations. Besides managerial capabilities, they can also expand the visibility and network or a company and thus address other liabilities of newness and smallness (Henseler 2006, Woywode/Keese/Tänzler 2012).5 As Brunnige/Nordqvist (2004) sum up: “ The need for entrepreneurial capacity and competence can be fulfilled in various ways. In some cases management may believe that it has alone the necessary resources to handle successfully the strategic renewal and to meet the new requirements awaiting the firm as a result of the change. If this is not the case, resources have to be acquired elsewhere. One interesting option in this respect is an enhancement of the board’s service role ” (Brunnige/Nordqvist 2004, p. 92). For sure the improvement of corporate governance mechanisms can also contribute to an increase in the
4 See chapter 3.2 for an analysis of different board roles and their theoretical foundations.
5 See chapter 3.2 for a discussion of different board roles.
likelihood of success in young firms. Therefore, research in this field is doubtlessly relevant in practice but at the same time provides intriguing knowledge for researchers. As Garg (2014) argues: “ Overall, the intersection of entrepreneurship and corporate governance is an exciting territory with many rich research opportunities to break new ground and enrich existing areas of research” (Garg 2014, p. 116). The topic of this thesis addresses this intersection with a focus on a special corporate governance instrument, namely ABs that can be either introduced voluntarily by a company or that can be forced by its shareholders 6, in the context of technology-based startups.
Figure 1: Focus area of the thesis
Types of Governing boards
(Source: own illustration)
focus area of the thesis
1.2 Motivation, goal and research questions
Considering the underlying problems that cause such high failure rates of startups, much more attention should be drawn to potential solutions and instruments. In practice, ABs are a frequently used corporate governance instrument. Since there is no legal restriction to report the establishment of ABs to any governmental registration office (such as the Handelsregister in Germany), the total number of ABs as well as the share of companies with such a board can only be estimated. Several studies investigated the percentage of companies using ABs, but results vary widely among different samples considered in the study. Findings may differ significantly between samples of family businesses and startups, between US and Germany,
6 See chapter 2.3 for further details.
between small and large companies and many other characteristics. The following table provides an overview of various, empirical estimations to give an overall impression:
Table 1: Usage of advisory boards in different countries and companies
Author (Year)
Country Type of company Estimation
Ward/Handy (1988) US SMEs 5 % (n=147)
Richter/Freund (1990) Germany SMEs 55,8% (n=258)
Krimsky/Ennis/ Weissman (1991) US Biotech firms 32,7 % (n=889)
Grundei/Talaulicar (2002) Germany Biotech and IT startups ~ 21 % (n=62)
Fahed-Sreih/Djoundourian (2006) Lebanon Family businesses 21 % (n=114)
Lamsfuß/Wallau (2012) Germany Family businesses 36 % (n=403)
Woywode/Keese/ Tänzler (2012) Germany Mid and large family businesses ~ 23 % (n=318)
BDC (2014) Canada SMEs ~6 % (n=1047) (Source: own illustration)
Without concrete estimations some other authors mentioned the frequent use and growing trend of ABs in Australia (Walker 2012), Canada (Dimma 2000), the US (Isaacson/Mitchell/Star 1994, Casper 2000, Morkel/Posner 2002) or worldwide (Power 2014). With regard to the target group of the present study, the findings of Grundei/Talaulicar (2002), who found ABs in 21 percent of their sampled German ITand biotech startups are most relevant.
Especially the way how a company is financed and the technological complexity may have an influence on the introduction of ABs. According to Schefczyk/Gerpott (2001) many VCs strongly encourage portfolio companies without legally required SBs 7 to introduce ABs instead, not only as additional control mechanism, but also as a platform to provide management support. Additionally, many authors link ABs to knowledge-intensive areas such as Life Sciences as well as Information and Communication Technologies (ICT), since AB memberships of experts such as
7 For a short analysis of SBs in German entrepreneurial firms see Bassen (2002).
professors that add knowledge and reputation can be often found in those cases (Krimsky/Ennis/Weissman 1991, Audretsch/Stephan 1996, Casper 2000, Morkel/Posner 2002, Elfring/Hulsink 2003). Also in Germany technology transfer from from research institutes to startups is of growing importance (Pinkwart/Heinemann 2004).
All in all, ABs in technology-based startups are a common phenomenon in practice that should gain some additional attention in research. However, an even more widespread use of ABs is prevented by a lack of knowledge and education (Jonovic 1989, Kroemer/Köhler/Musch 2012) as well as a missing recognition of an overall advisory need by many founders and a general reluctance towards external influences due to pride and a high sensitivity in issues that effect managerial freedom (Nash 1988, Höppner 2006). Also potential leakage and disclosure of confidental information through ABs is another reason for not introducing ABs,which is especially relevant in knowledge-intensive technology-based firms (Zahra/Filatotchev 2004, Erakovic/Tchaka 2010). Although there a examples of startups who directly start with an AB from scratch, overall it still seems relatively unusual to establish ABs in the very early phases of venture development.
Therefore, the practical purpose of this dissertation is to describe the status quo of AB usage in technology-based startups and to develop recommendations, for both young firms and their stakeholders, on how to use ABs in a fruitful way. Through a better awareness, they will have the possibility to decide if they should introduce voluntary ABs or how they should react if they are forced to introduce an AB by third parties. Furthermore, they may derive useful ideas on how to organize ABs and how to staff them with different types of AB members according to the given circumstances. AB members also benefit from an overview of different practices, which allows them to evaluate their own activities and experiences and maybe to improve their own behavior in some cases. Also for investors who frequently acquire shares of startups this dissertation may give useful recommendations on how different AB roles may influence the satisfaction of entrepreneurs with the AB and the performance of the company. This will help entrepreneurs to understand the AB construct which is seldom part of scientific or practice-oriented entrepreneurship literature.
Besides its practical relevance, the thesis also addresses several gaps in academic research. The claims of Morkel/Posner (2002) and BDC (2014) who said that literature does not cover the topic of ABs in startups sufficiently can be confirmed. Appendix 1 presents a literature review on empirical literature on governing boards including 58 studies. It provides a representative collection of some of the most important empirical studies and it gives an impression of the characteristics of past and current research. It is not intended to provide a complete archive of governing board literature, but to provide an indication of typical questions, research designs and samples. As it will be explained immediately, there are three major gaps of governing board research that become obvious: firstly, it is biased towards BODs in one-tier systems, secondly it mainly concentrates on large firms and to some extent on family businesses and lastly it is focused on easily accessible board characteristics and quantifiable input-output relations, neglecting the social character of interaction. According to a presentation by Mike Wright on SME governing boards at the Strategic Management Society Conference (September 2014 in Madrid) six potential research fields that partially overlap with the previously developed gaps, would benefit current corporate governance and strategy research: 8
- Contributions of governing board members according to their previous experiences
- Composition of governing boards
- Comparison of startup, family firm and large firm governing boards
- Quantitative or qualitative research on different governing board types such as BODs or ABs
- Heterogeneity of investors
- Process or longitudinal studies.
Also studies such as Zahra/Pearce (1989), Sharma/Chrisman/Chua (1997), Shleifer/Vishny (1997), Hermalin/Weisband (2003), Bammens/Voordeckers/Van Gils (2011) further confirm these identified gaps, which will be elaborated now:
8 Gaps that will be addressed in the given study are highlighted by italics.
Gap 1: A focus on BODs one-tier systems
Analyzing the table in appendix 1 it is shown that existing research is focusing on BODs in one-tier corporate governance systems, while it underweights two-tier systems. Reasons could be the widespread adaption of one-tier systems all over the world and in addition the research excellence in many economies affected by one-tier systems such as the US, the United Kingdom or some Scandinavian states. Another reason could be the availability and accessibility of data, for example data of S&P 1500 companies that is included in databases such as the Governance Data database of Wharton Research Data Services (WRDS). Also the objective of research to provide implications for the political debate could be a motive for intense research on mandatory boards such as BODs instead of ABs. However, research on two-tier systems and various board types should be intensified, since many important economies are based on two-tier systems and it is questionable if results of BOD-based studies are appropriate for other governing boards, because the regulative framework heavily determines corporate governance practices (Di Maggio/Powell 1983, Casper 2000, Grundei/Talaulicar 2002). Hence, many authors encourage further investigating two-tier systems and various legal frameworks (Xiao/Dahya/Lin 2004, De Andres/Azofra/ Lopez 2005, Brunninge/Nordqvist/ Wiklund 2007, Yeh/Taylor/Hoye 2009). Moreover, several other authors mention a gap in research on ABs in general (Morkel/Posner 2002, Höppner 2006, Mitter/Duller/Feldbauer-Durstmüller 2012, Ding/Murray/Stuart 2013, BDC 2014). As Blumentritt (2006) criticizes: “ The nature, role, and composition of advisory boards have received almost no attention in the academic literature” (Blumentritt 2006, p. 67). For example the absence of liability in ABs could cause substantially changed behavior of AB members compared to mandatory boards. Also the fact that small and mid-sized firms in two-tier systems such as Germany are not forced to have a supervising instance may have implications for the role of voluntary ABs.
Therefore, focusing on ABs in technology-based startups truly meets a gap in academic research. It is reasonable that such a flexible instrument fits very well into uncertain and dynamic entrepreneurial environments, since the legal flexibility
offers a lot of space for different roles and concrete tasks of ABs in practice. Hence, it is an interesting field for academic research.
Gap 2: A focus on large firms
The literature review also indicates a bias of current governing board research on large firms and again data availability might be one important reason. While there was growing interest in these issues in family businesses, research on corporate governance mechanisms in new ventures is very rare and should receive more attention (Grundei/Talaulicar 2002, Hermalin/Weisbach 2003, Erakovic/Tchaka 2010, Garg 2013, Wilson/Wright/Altanlar 2014). Only one-fifth of the studies mentioned in appendix 1 are based on samples of entrepreneurial firms. However, there are significant differences in corporate governance mechanisms, especially in the role of governing boards, between startups, family businesses and large companies. While some findings on roles and functions of governing boards in large firms and family businesses might be suitable in the context of startups as well, others like succession planning are not appropriate and the importance and meaning of roles and functions may differ to startups. Since the same holds true for other types of companies such as family businesses and SMEs, many contributions of governing board research can be called into question for a huge mass of companies. Consequently, it is frequently claimed by various authors that research on family businesses (Van den Heuvel/Van Gils/Voordeckers 2006, Woywode/Keese/Tänzler 2012), on SMEs (Huse 2000, Fiegener 2005, Minichilli/Hansen 2007) and especially on entrepreneurial firms (Daily/Dalton 1992, Grundei/Talaulicar 2002, Hermalin/Weisbach 2003, Erakovic/Tchaka 2010, Wirtz 2011, Garg 2013, Krause/Semadeni/Canella 2013b, Garg 2014) should be extended. Furthermore, the importance of these types of firms for modern economies further increases the necessity of additional and more specialized research in this field. Some authors support this call for research by claiming that SMEs account for a considerable share of wealth in most countries (see e.g. Brunninge/Nordqvist/Wiklund 2007, Mitter et al. 2014) and startups will have a growing impact in the future.
Therefore, it seems necessary to consider the special conditions of technologybased startups and to analyze differences between those companies and large companies, which potentially affect governing boards.
Gap 3: A focus on quantitative measurement
Recent literature on governing boards is often limited to questions which focus on demographic features of governing boards, such as their size, the ratio of independent outsiders or internal structures like committees or meeting frequency and their impact on several output measures, typically based on quantitative methods (Brunnige/Nordqvist 2004, De Andres/Azofra/Lopez 2005, Bammens/Voordeckers/Van Gils 2011). The assumption behind those approaches is a direct relationship between governing board demography and outputs, mostly performance, that can be used as a proxy for all behavioral social processes or resource and information access of governing board members that are neglected (Gabrielsson 2007). Despite there are existing studies, the understanding of governing board demography, its determinants and its impacts is still not sufficient, because many studies have mixed or contrary results, others are lacking significance, since the oversimplification by applying only quantitative approaches does not reflect the complexity of governing boards and social interactions. For example Daily/Dalton (1992) discovered startups have a high share of outsiders, whereas Johannisson/Huse (2002) subtend smaller companies have a low outsider ratio. As another example, Huse/Rinova (2001) found managers are not emphasizing the service functions of governing boards, while Van den Heuvel/Van Gils/Voordeckers (2006) claim family business managers perceive the highest value in that role and Minichilli/Hansen (2007) and Clarke/Klettner (2009) confirm service issues are more important than control. Hence, it is questionable if research should proceed with the same methods and research questions. Although governing board practices might be shaped by some of these characteristics, the corporate environment and social processes should not be disregarded. Thus, many authors claim qualitative research methods would enrich the debate on corporate governance (e.g. Huse 2000, Gabrielsson 2007, Bammens/Voordeckers/Van Gils 2011, Krause/Semadeni/Canella 2013b). Moreover, especially AB-related publications seem to be more practice-oriented,
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QUELQUES BANDITS
Nous sortions de la Renaissance, mon ami Cantarelli et moi. Orso Cantarelli est un Corse d’Ajaccio plus qu’aménagé par dix ans de séjour parisien et aussi répandu dans la politique que dans la littérature ; le succès de l’Adversaire se reflétait dans ses yeux, la solidarité corse atteint à l’intensité et à la force d’une francmaçonnerie, et ce soir-là, tout vibrant encore de la scène finale entre Guitry et Brandes, Orso Cantarelli triomphait dans Emmanuel Arène. J’éprouvai le désir de doucher cet enthousiasme.
— Ah ! ces Corses, lui disais-je en l’installant devant une douzaine de natives, quels admirables conquérants, nés pour l’intrigue et l’aventure, et quels dons de séduction ! Ce sont les derniers conquistadors ou condottieri. Voyez, ce siècle appartient à la Corse : Napoléon a conquis l’Europe et Emmanuel Arène vient de dompter Paris. Et forçant sur l’ironie pour exaspérer le légendaire orgueil de la race : D’abord vous êtes un pays de bandits.
Cantarelli haussa les épaules.
— Vous croyez encore que nous avons gardé le culte des bandits ? Quel littérateur vous faites ! Le succès d’Arène vous gêne, il vous gênerait échu à n’importe qui, mais vraiment vous avez perdu votre temps, les deux mois passés, cet été en Corse, et vous croyez encore à notre enthousiasme pour ces malheureux proscrits. C’est une pitié et un bluff. Écoutez-moi, je suis bon prince :
« Nos bandits ! Vous avez, comme tous les continentaux, donné dans le piège du décor. Les bandits ! C’est le cadre de montagnes et de forêts qui les idéalise, la distance aussi, car ils sont si loin de vous par la race et les habitudes ! La plupart enfin bénéficient à vos yeux du recul du temps. Morts ou retirés dans les petits villages du cœur de la Corse, ils vous apparaissent, dans les récits des paysans, comme des héros de la légende ; ce sont les princes lointains du maquis. Si l’on vous en montre un patriarche comme Antoine Bellacoscia, nimbé de cheveux blancs, de petits-enfants et de souvenirs, et, grangrené de romantisme comme vous l’êtes, vous le prenez pour un personnage de la Bible. » Et Orso Cantarelli m’enveloppait de la raillerie de ses yeux clairs ; puis, tout en tirant une bouffée de fumée d’un gros cigare de son pays :
« Il faut donc en découdre de vos enthousiasmes, cher ami, et surtout ne pas propager cette opinion, que nous avons tous l’admiration de nos bandits. C’est avec ces histoires-là que vous nous faites la réputation de sauvages, et notre île finit par passer pour un repaire. Je sais bien que ce banditisme avéré nous vaut, l’hiver, la clientèle d’Allemandes sentimentales et de vieilles misses anglaises, mais croyez que nous préférerions de beaucoup des hiverneurs français ; mais tous se cantonnent dans la Riviera. Hors Nice, Cannes et Monte-Carlo, pas de salut pour un Parisien ! Mais revenons à nos bandits, quelques-uns sont de véritables sacripants ; je vous en fais juge :
« En 1889, un nommé Rochini gagne le maquis et le tient pendant quinze ans, terrorisant tout le pays, de Propriano à Sartène ; savez-vous ce qu’avait fait Rochini ? Amoureux d’une paysanne de son village et repoussé par elle (la fille avait un fiancé) Rochini déclarait à la malheureuse qu’il les tuerait, elle et l’homme de son choix, si elle ne consentait pas à le suivre et à l’épouser. La fille, en vraie Corse qui n’a qu’une parole, riait au nez de Rochini. Celui-ci allait l’attendre à la fontaine — la fontaine où tout le village corse se rencontre, s’aborde et s’entretient — s’arrangeait pour l’y trouver seule, la mettait encore une fois en demeure de choisir entre lui et son fiancé et, sur son refus, l’étourdissait d’un coup de crosse
de fusil et lui coupait les seins. Deux jours après, le fiancé de la misérable fille recevait deux balles dans la tête. Un Apache de Belleville n’eût pas fait mieux. Là-dessus Rochini prenait le maquis et le tenait pendant quinze ans. Voilà ! Ne trouvez-vous pas un tel personnage bien intéressant ?
« D’ailleurs il ne faut pas croire que le village et la montagne tiennent en grande estime leurs bandits. Ils les subissent, terrorisés par les représailles toujours menaçantes de ces « outlaws ». Le paysan corse déteste le gendarme, mais a encore plus peur du bandit. Une fois qu’il a gagné le maquis, le bandit s’érige de luimême en espèce de persona sacra. En même temps qu’il s’arroge le droit de tirer au jugé et au visé sur tout porteur d’uniforme, il prélève la dîme sur le paysan, il s’installe à son foyer, s’assied à sa table, réclame le souper et le gîte et, quelquefois, la femme de son hôte. Avec cela, horriblement méfiant (car ses méfaits ont mis sa tête à prix et dans ce pays pauvre, la prime toujours assez forte peut tenter les consciences) le bandit, toujours sur l’œil, craint l’embuscade, la surprise et la trahison ; il entre chez le paysan en le mettant en joue et exige, à l’heure des repas, que son hôte goûte avant lui de tous les plats. Cette complicité, supportée comme un joug, amène fatalement de brusques révoltes ; en tuant ou en livrant le bandit, le paysan alors se venge des vexations subies, et c’est la mort de Feretti, le bandit de Propriano.
« Poursuivi par les gendarmes, il s’était réfugié chez un sien parent, lequel habitait une masure assez isolée dans la montagne. Il s’y était installé comme chez lui, y commandait en maître, mettant la main au plat et même aux corsages des filles. Il avait fait de celle de son hôte, sa maîtresse, le père, dompté par la terreur, n’osait rien contre le mécréant. Feretti plein d’une juste méfiance pour l’homme qu’il terrorisait, lui faisait manger, avant et devant lui, de tous les plats qui lui étaient servis. Le paysan eut une idée géniale : il trouva le moyen d’introduire de la strychnine dans des figues fraîches, il en avait délicatement coupé la queue. Les fruits empoisonnés furent mêlés à d’autres, intacts : « Mange », faisait Peretti à son parent. Le paysan s’exécutait. Il reconnaissait les figues. Rassuré, le bandit
puisait à l’assiette. A la quatrième figue il tombait foudroyé ; le paysan s’était délivré de son oppresseur.
« Parfois, c’est l’appât du gain qui décide de la mort du bandit. La prime a tenté le paysan, et dans ce cas-là, c’est presque toujours un parent du bandit ou un de ses guides qui fait le coup, car le bandit ne marche que précédé ou escorté d’un guide et, parfois, de plusieurs, qui font autour de lui un vrai service d’avant-garde. Ils explorent le pays, s’assurent de la sécurité du village où le proscrit doit passer, préparent son gîte et favorisent sa fuite en cas d’alerte. Comme les Chouans de Vendée, ils ont entre eux des signes d’eux seuls connus ; trois pierres posées sur le bord de la route, à l’entrée d’un village, préviennent le bandit de ne pas aller plus loin, le lieu n’est pas sûr pour lui ; telle ou telle entaille dans un tronc de châtaignier veut dire que les gendarmes vont passer par là et qu’il doit bifurquer au plus vite à droite ou à gauche pour ne pas tomber entre leurs mains ; et dans toute la contrée, l’arbre et la roche deviennent complices pour protéger et sauver le bandit… Quand l’homme dont la tête est mise à prix se dérobe, le paysan qu’a tenté la prime s’avise quelquefois d’étranges supercheries ; ce fut le cas d’un des neveux de Jacques Bellacoscia.
« Il rêvait depuis longtemps de gagner la grosse somme. La mort de son terrible oncle pouvait seule la lui fournir ; mais, outre que Jacques Bellacoscia n’était pas facile à surprendre, même par un des siens, ce neveu intéressé redoutait les représailles de la famille. Antoine Bellacoscia n’était pas homme à laisser le meurtre de son frère impuni, et puis, tous les Bonelli auraient pris les armes, c’était du coup tous les Bellacoscia dans le maquis.
« Ce madré neveu se décida pour un bandit moins proche, un bandit qui ne fût pas de la famille.
« Un nommé Capa tenait alors la montagne entre Vivario et Vizzavona, c’était un fin limier qui avait toujours déjoué les marches et les contremarches de la maréchaussée et dont, chargée de méfaits, la tête était chèrement cotée. Le neveu de Bellacoscia se rabattit donc sur Capa, mais Capa n’était pas non plus homme à se laisser approcher et abattre comme un vulgaire gibier. Après trois
mois de poursuites et d’embuscades, le malheureux coureur de prime devait renoncer à tuer le fameux bandit, mais il ne renonçait pas à la somme.
« Dans la légitime appréhension du fusil et des balles de Capa, il se décida à une substitution ; le tout était de se procurer un cadavre et de le fournir à la gendarmerie comme celui d’un bandit. Un malheureux mendiant porteur de saintes images, un vieux pellegrine, comme on les appelle ici, fut guetté et assassiné par le paysan dans un sentier de forêt. La Corse est infestée de ces vieux montreurs de saints, la plupart Italiens de naissance et qui, loqueteux et chenus, s’en vont de village en village faire baiser aux paysans la figure de cuivre ou d’étain repoussé, qu’ils portent religieusement pendue à leur cou. Ceux-là sont sans défense, sans famille aussi, et leur meurtre est facile. Un carrefour de forêt vit le crime. L’homme abattu, l’assassin s’empressait de le défigurer, il lui brûlait avec de la poudre la barbe et le visage. Le cadavre ainsi rendu méconnaissable, le chasseur de prime courait prévenir la gendarmerie, l’amenait sur les lieux, et lui faisait reconnaître le mort.
« — C’est Capa, je l’ai guetté, suivi et puis je l’ai tué ! J’ai bien visé, voyez plutôt, à la tête.
« La maréchaussée mystifiée donnait dans le piège, un procèsverbal constatait la mort du fameux Capa, le meurtrier touchait la prime et vivrait encore heureux de polenta de châtaigne en hiver et de polenta de maïs en été, si Capa, furieux de passer pour mort de son vivant, n’avait réclamé.
« Il écrivit au préfet, au procureur de la République, aux directeurs de journaux même, pour démentir sa mort et bien établir qu’il était en vie ; il remua autour de la supercherie, qui le rayait du nombre des Corses, l’opinion publique et la presse. L’assassin du faux Capa était arrêté, une enquête était ouverte qui prouvait son crime, l’identité du pauvre pellegrine était retrouvée et le Corse amateur de primes passait en Cour d’assises et payait sa substitution de cadavre de sa tête.
« Il fut guillotiné à Bastia,
« L’affaire et la mort du fameux bandit Poli, sa rencontre et ses démêlés avec le préfet d’Ajaccio dans la forêt d’Aïtone, la victoria du préfet arrêtée avec son escorte officielle par Poli et ses guides, et les conditions du bandit imposées à l’officier ministériel couché en joue pendant tout l’entretien, toute cette aventure détachée, on dirait des Brigands d’Offenbach, a défrayé trop récemment l’opinion et la presse pour y revenir. Poli, véritable brigand bien plus que bandit, avait été trouver son oncle Lecca et essayé de le rançonner sous menace de mort.
« Reçu à coups de fusil par Lecca, Poli avait juré de se venger et, à quelque temps de là, en effet, Lecca avait été trouvé tué. Poli avait alors gagné le maquis. Arrêté, puis condamné par la Cour de Bastia, il avait été expédié en Nouvelle-Calédonie. Il était parvenu à s’en échapper, s’était réfugié en Italie et, incarcéré à Rome comme anarchiste, y avait toujours caché son identité et son nom. En Corse, on le croyait mort.
« L’arrestation de ses deux frères, impliqués dans l’assassinat de Lecca et emprisonnés comme complices, le ramenait au pays. En apprenant que ses frères étaient compromis à cause de lui et par lui, Poli, bravant tous les périls, rentrait en Corse. Il y affirmait sa présence par des meurtres, des violences et des rapines, mettait le pays en coupe réglée et de brigandage en brigandage, d’audaces en audaces arrêtait la victoria du préfet et mettait ce dernier en demeure de faire acquitter ses frères, alors sur le banc des Assises de Bastia : « Ils étaient innocents, lui seul était coupable et se faisait gloire de le proclamer. » « Le préfet promettait tout ce qu’exigeait le bandit : les frères de Poli sortirent acquittés des Assises, mais la nouvelle de la rentrée du meurtrier en Corse y avait ramené les fils de Lecca, l’oncle assassiné. Pour venger leur père les trois fils Lecca, l’un employé de chemin de fer sur le continent, l’autre sousofficier en Tunisie et le troisième établi à Bône, en Algérie, obtenaient des congés, se faisaient libres et, rentrés dans l’île, y gagnaient le maquis.
« Ils y organisaient la chasse au bandit. Poursuivi par ses cousins, traqué par les gendarmes, Poli était ramassé un matin en
forêt, mort à son tour. Un de ses guides l’avait empoisonné pour toucher la prime.
« Pour une vendetta corse, en voilà une qui, à mon avis, vaut bien celle de Colomba et pourrait tenter un moderne Mérimée, et Poli a été tué, il y a six mois à peine.
« Les légendaires exploits des deux Bellacoscia deviennent bien pâles dans le recul du temps auprès du sang tiède et fraîchement versé de la querelle Lecca-Poli, et puis Antoine Bellacoscia a bien perdu de son prestige depuis que les autorités de l’île l’ont classé bandit décoratif dans les fêtes officielles ! Au dernier voyage de M. Lockroy en Corse, une administration trop zélée n’a-t-elle pas eu l’idée de camper le vieux Bellacoscia en costume de bandit sur l’affreuse glacière en béton qui déshonore la station de Vizzavona, et de grouper autour de lui une vingtaine de vieux paysans guêtrés de peaux et vêtus de velours noir, toute une figuration de bandits de circonstance qui, à la descente du malheureux Lockroy du train, saluèrent d’une brusque fusillade Son Excellence.
« Fusillade héroïque de la Navarraise presque !!
« M. Carré n’eût pas mieux fait. Couleur locale et cabotinage.
« Le préfet d’alors avait servi des bandits au ministre, les bandits se sont revanchés des préfets dans Poli.
« Un mot de Bellacoscia pour finir, du vieil Antoine Bellacoscia, de celui-là même qu’ont un peu démonétisé les cartolines et les fêtes officielles. Il fleure une odeur sauvage de poudre et de maquis.
« On causait au village du nouvel uniforme des gendarmes, Bellacoscia était présent et, comme on consultait son avis, le vieil homme, clignant de l’œil sur la grenade de cuivre doré, qui met un point brillant au-dessus de la visière du shako d’aujourd’hui : Che bella mira ! se contentait-il de dire ! Quel beau point de mire ! et dans sa voix tremblait comme un regret.
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