Losing Autonomy to Gain It: How Boards and Investors Enhance Entrepreneurial Motivation

Abstract For entrepreneurs, attracting investors and creating a board are significant events where they must relinquish control over their ventures. Existing literature highlights this autonomy loss as a central concern for entrepreneurs, suggesting a trade-off between attracting needed resources and maintaining control over the company. However, despite autonomy frequently being identified as a key motivational factor for entrepreneurs, the possible effects of board formation and investment on entrepreneurs’ motivation have not been directly addressed. Drawing from interviews with 48 Danish entrepreneurs, this qualitative grounded theory study challenges the dominant exchange-based view of autonomy loss as purely detrimental, showing how directors and investors may enhance rather than undermine entrepreneurial motivation. We find that while entrepreneurs may initially fear losing independence, they often find motivation in the trust and supportive guidance from the board. Our findings furthermore show a dynamic, dialectical relationship between autonomy and control in which directors and investors evolve from being perceived as external constraints to becoming vital sources of motivation and personal development.