Abstract
Drawing on social identity theory, we explore the social identities of next-generation founders from business families and how these shape their venture creation activities. We find that differences in the valence and interplay of family-internal—such as family expectations and legacy—and family-external identity considerations—including peer influences—shape founders’ self-conceptions, yielding three identity types: legacy preservers, independence seekers, and identity integrators. These guide key venture creation activities, including opportunity identification, business model development, resource mobilization, and strategic vision. This study contributes by developing next-generation founder identities, linking them to action around venture creation, and broadening the understanding of entrepreneurship beyond succession.
Keywords
Introduction
Entrepreneurial activity among next-generation business family members is undergoing a remarkable transformation (Orozco-Collazos, 2025; Ramírez-Pasillas et al., 2021; Zellweger et al., 2015). Rather than mainly striving to succeed in the family business, many now aspire to create their own new ventures. A global large-scale study revealed that only 4.9% of student participants with a family business background anticipated joining their family business within 5 years of graduation, while more than 34% expected to have established their own ventures within the same timeframe (Zellweger et al., 2015). These figures highlight the significance of new venture creation among next-generation members. Yet, despite its growing relevance, research on this phenomenon has remained scarce, with only a few notable exceptions (Combs et al., 2021; Orozco-Collazos, 2025; Pittino et al., 2018; Prügl & Spitzley, 2021; Ramírez-Pasillas et al., 2021).
The next generation’s growing interest in starting their own ventures may be grounded in the opportunity to align these businesses with their personal goals and aspirations, allowing for greater self-expression (Fauchart & Gruber, 2011). Because founders invest much of their personal identity into their new ventures, these businesses often reflect the meanings they attach to being an entrepreneur. Recent research in entrepreneurship has shown that founders’ social identities—their sense of “who am I?” and “who do I want to be?”—profoundly shape their venturing behaviors (Alsos et al., 2016), as well as the characteristics and strategies of the ventures they create (Fauchart & Gruber, 2011; Powell & Baker, 2014, 2017). However, little is known about how such identity dynamics unfold among next-generation founders 1 from business families (Canovi et al., 2022). In contrast to founders without a family business background, the social identities of next-generation founders are shaped by unique, context-specific factors, such as overlapping family and firm identities (Wielsma & Brunninge, 2019), which may create distinct motivations and tensions when starting new ventures, including how they approach key venture creation activities.
Integrating a social identity perspective into the burgeoning field of new venture creation by the next generation (Combs et al., 2021; Pittino et al., 2018; Prügl & Spitzley, 2021; Ramírez-Pasillas et al., 2021; Riar et al., 2022) could significantly advance our understanding of this phenomenon. Prior studies have primarily focused on family factors, including family cohesion and flexibility (Combs et al., 2021), communication patterns (Prügl & Spitzley, 2021), and support (Hahn et al., 2021; Pittino et al., 2018; Riar et al., 2022), portraying the family as the dominant source of influence in next-generation venturing. However, this focus provides limited insights into how next-generation founders’ own understanding of who they are as founders affects their new venture creation activities. A social identity perspective extends beyond these approaches by uncovering not only the business family’s role in the next generation’s venturing behaviors but also holds the potential to uncover family-external factors—such as non-family peers and broader entrepreneurial networks—that influence the next generation’s entrepreneurial identity as a start-up founder and their approaches to new venture creation. Understanding this link between identity and entrepreneurial behavior is crucial because next-generation founders do not act in a vacuum: their self-concepts guide how they recognize opportunities, mobilize resources, and envision their ventures’ strategic trajectories. By connecting identity types to concrete new venture creation activities, we can explain not only why next-generation founders pursue specific entrepreneurial paths but also how they enact these identities through their actions and decisions when creating their own businesses.
Drawing on social identity theory (SIT), our study has two primary aims. The first is to explore the heterogeneity of social identities among next-generation founders. Second, we explore how these social identities of next-generation founders affect key new venture creation activities. Accordingly, we pose the following research questions: (1) What types of social identities can be identified among next-generation founders, and (2) how are these identity types related to the next generation’s new venture creation activities?
To answer these questions, we conducted a comprehensive exploratory study based on 46 interviews with 35 next-generation business family members who had recently launched different types of new ventures, all being formally independent of the family firm (Minola et al., 2021). We analyzed data from these in-depth interviews supplemented by firm- and founder-related materials such as websites, magazine articles, and archival data using an inductive methodological approach (Gioia et al., 2012; Miles & Huberman, 1994).
This study has three main contributions to the literature. First, by applying a social identity theory within the context of business families, we develop a typology of three basic identity types—legacy preservers, independence seekers, and identity integrators—and offer a nuanced framework for understanding the unique social identities of next-generation founders by uncovering the interplay of family-internal and family-external identity considerations simultaneously (with the latter remaining underexplored so far). Thereby, we extend pioneering research focusing solely on family-internal factors (Combs et al., 2021; Pittino et al., 2018; Prügl & Spitzley, 2021; Ramírez-Pasillas et al., 2021; Riar et al., 2022).
Second, we demonstrate how social identity types directly relate to key aspects of new venture creation activities, including opportunity identification, business model development, resource mobilization, and strategic vision and growth. By empirically linking social identities to action around new venture creation, this study bridges the gap between identity theory and practical entrepreneurial behavior within the context of business families (Canovi et al., 2022; Sieger et al., 2016). We thereby complement current research on the next generation’s venturing activities (Combs et al., 2021; Prügl & Spitzley, 2021; Ramírez-Pasillas et al., 2021).
Third, as scholars increasingly recognize the family as the central level of analysis for family firm longevity and value creation across generations (e.g., Habbershon & Pistrui, 2002; Nordqvist & Melin, 2010; Zellweger et al., 2012), our research places the underexplored perspective of the next generation—and the role as founders of formally independent start-ups—center stage. In doing so, we contribute to the limited understanding of the diverse roles the next generation of business families may assume beyond intergenerational leadership succession (Björnberg & Nicholson, 2012; Zahra & Sharma, 2004), highlighting an entrepreneurial role that is becoming increasingly popular among the next generation (Prügl et al., 2023; Sieger et al., 2021, 2023).
The remainder of this article is structured as follows. We begin our exploration with an overview of SIT and next-generation venturing, followed by explaining our methodological approach, presenting our findings, and discussing the theoretical and practical implications. We conclude with our study’s limitations and directions for future research.
SIT and Entrepreneurial Behaviors and Actions
Identity encompasses the meanings and self-understandings individuals apply to themselves in relation to others (Stets & Burke, 2000), helping them answer fundamental questions such as “Who am I?” and “Who do I want to be?” (Cardon et al., 2009; Farmer et al., 2011; Hoang & Gimeno, 2010; Powell & Baker, 2017). SIT, a prominent theory in social psychology literature on the human self, addresses an individual’s identification with a social category or group membership (Stets & Burke, 2000). According to Tajfel (1978), a person’s social identity is “that part of an individual’s self-concept which derives from his knowledge of his membership of a social group (or groups) together with the value and emotional significance attached to that membership” (p. 63). Interactions with others are vital for the development of a person’s social identity because interactions enable them to complete social categorizations and determine the social groups with which they wish to associate (the “in-group”) (Stets & Burke, 2000, p. 225).
SIT facilitates alignment between an entrepreneur’s identity and their behaviors and actions during the creation of a new venture. This is because individuals strive to act in ways consistent with the meanings inherent in their identities. In other words, individuals use their identities to structure their thoughts and actions, comprehend their environment, and respond to specific challenges (Browman et al., 2017; Oyserman et al., 2017). Consequently, they behave in ways that correspond with their identity perception. Therefore, SIT allows us to broaden the concept of entrepreneurial behaviors beyond those that adhere to pure economic logic, that is, for-profit ventures (Gruber & MacMillan, 2017). It also enables us to assess founders who establish ventures for more socially oriented reasons, such as concerns for others and a desire to make a positive impact. Moreover, SIT emphasizes the importance of founders’ relationships with their surrounding social spheres. These spheres significantly affect nearly all actions founders undertake, as they provide access to both tangible and intangible resources such as ideas, people, business relations, know-how, and capital. These resources are essential for founders to establish their ventures.
Researchers who have used the SIT perspective in entrepreneurship studies, despite its relatively recent adoption, agree that founders’ social identities direct their behaviors and actions, and affect how they participate in forming their ventures (Alsos et al., 2016; Fauchart & Gruber, 2011; Gruber & MacMillan, 2017; Powell & Baker, 2014). For example, drawing on SIT, Fauchart and Gruber (2011) investigate how founders’ social identities shape the process of new venture creation, and how individuals strive to behave and act in ways that align with their identities. The authors found that founders’ social identities are systematically connected to various entrepreneurial behaviors and actions. Specifically, they identify three types of founder social identities: “Darwinian” founders, who follow conventional entrepreneurial steps of engaging in behaviors aimed at maximizing private economic returns, and “Communitarian” and “Missionary” founders, who act in ways that demonstrate their care for others.
Therefore, the viewpoint provided by SIT can advance a fresh understanding of how next-generation founders operate and act in creating new ventures, ultimately shedding light on how and why these ventures come into existence. Unlike approaches focusing solely on familial factors, SIT enables us to explore broader social contexts and identity dynamics that shape the entrepreneurial behavior of members of the next generation of business families. This perspective is particularly relevant and distinctive among the next generation, where individuals may not necessarily aim to maximize private economic returns as entrepreneurs but may instead seek to generate value for present and future family generations through their ventures. Conversely, SIT might also reveal how some next-generation founders endeavor to assert their independence from business family legacies by establishing their own enterprises (e.g., Combs et al., 2021; Ramírez-Pasillas et al., 2021). While current research often emphasizes the influence of family dynamics, SIT enables us to go beyond these familial factors, uncovering how the next generation self-categorizes as founders and the meanings they associate with creating their own ventures. As a result, we gain a deeper understanding of how the next generation’s identities as founders influence their subsequent entrepreneurial behaviors, actions, and strategic visions of their new enterprises—insights that are critical for comprehending the diversity of the next generation’s entrepreneurial paths and established new ventures.
New Venture Creation Among Next-Generation Business Family Members
Current research on next-generation venturing activities has predominantly focused on the influence of the family system, exploring how various familial factors shape the entrepreneurial intentions and actions of next-generation members. Pittino et al. (2018) examine how family support, including emotional backing, resources, and network connections, plays a crucial role in fostering entrepreneurial activities among the next generation, highlighting the importance of a nurturing family environment. Riar et al. (2022) investigate the different venturing motives and types within entrepreneurial families. Their study underscores the role of family-driven motives—such as legacy continuation and desires for independence and personal achievement—in shaping the venturing paths chosen by next-generation members. Similarly, Ramírez-Pasillas et al. (2021) examine how next-generation family members who depart from the family’s original business context relate to and interact with other family members to advance their new ventures. This highlights the complexities of balancing familial relationships while pursuing independent new venture creation. Combs et al. (2021) further explore how the family system’s flexibility and cohesion affect where next-generation members choose to pursue entrepreneurship—whether within the family firm, its portfolio, or independently. In addition, Prügl and Spitzley (2021) investigate how family communication patterns, particularly conformity and conversation orientations, affect the entrepreneurial activities of the next generation, finding that these communication styles significantly influence the degree to which next-generation members strategically prioritize external corporate venturing activities.
However, despite these insights, there is limited understanding of what differences between basic types of social identities of next-generation founders can be observed and how these individuals develop their own new ventures based on their identity types (e.g., after deciding to what degree to either align with or differentiate from the family business). By adopting a social identity perspective, we can extend this understanding beyond familial factors to explore heterogeneity among social identities and how the next generation’s self-categorization as start-up entrepreneurs influences their venture creation activities. This approach helps explain not only why they choose to contribute to the family firm’s continuity or seek differentiation but also how they navigate key activities during new venture creation after they have committed to establishing their own enterprise. Although we know that the next generation draws on various degrees of business family support when launching their own firms (Pittino et al., 2018; Ramírez-Pasillas et al., 2021; Riar et al., 2022), our understanding of differences in who the next-generation founders are or want to be and how they relate to entrepreneurial action remains limited. This study aims to fill these gaps by adopting a social identity perspective that explores the self-concepts of next-generation founders and connects them with their actual new venture creation activities.
Method
Research Setting and Sampling
Our study adopts an exploratory, qualitative approach (Edmondson & Mcmanus, 2007), drawing on in-depth interviews with next-generation founders who “know what they are trying to do and can explain their thoughts, intentions, and actions” (Gioia et al., 2012, p. 17) as our primary source of data. Following this logic, we want to give voice to informants at all stages of our research to discover new perspectives and insights (Cosson & Gilding, 2021). We conducted 46 semi-structured, in-depth interviews with 35 next-generation founders from German-speaking business families. 2 Following SIT, which proposes that social identities develop through interactions with the environment and result in varying outcomes, we selected next-generation entrepreneurs from a range of new ventures and family businesses to gain exposure to potential differences in previous experiences. Given our exploratory approach, we did not seek a representative sample. We employed a purposive sampling strategy. Therefore, we deliberately sought maximum diversity in both the new ventures (in terms of size, sector, and connection to the family business) and family businesses (in terms of age, size, and sector) of the next-generation entrepreneurs (see Cosson & Gilding, 2021). Our data draws on formally independent new ventures only, considering recent literature on two basic types (T1 and T2) of formally independent new ventures (Minola et al., 2021): T1 ventures correspond to what Minola et al. (2021) define as family venturing—ventures that are external to the family firm but internal to the family. They remain connected to the business family through ownership or resources, while being legally and operationally separate from the family firm. For instance, next-generation founder Tim (ID 3) established an architecture office inspired by his father’s ideas and using parts of the family firm’s infrastructure, with the long-term goal of complementing the core business. T2 ventures align with external corporate venturing—ventures that are external to both the family firm and the business family. For example, next-generation founder Tavis (ID 19) launched a music agency entirely unrelated to the family firm’s diversified group of companies and deliberately avoided any family or business involvement or support. This distinction allows us to capture a broader range of social identity types and new venture creation activities among next-generation founders. While we aimed to capture the high heterogeneity in the next generation’s new ventures and family businesses, we maintained a similar general setup (Eisenhardt, 1989, 2021). First, we selected next-generation members of the business family as informants because of their ability to provide insights into their personal experiences and how these experiences, which are crucial components of social identity development, might have influenced their venture creation activities (see Murphy et al., 2019). By that, our study adopts an interpretivist epistemological stance (Guba & Lincoln, 1994), recognizing that knowledge is socially constructed and shaped by the lived experiences and perspectives of next-generation founders. We deliberately focused on this single stakeholder group, as we believe the unique insights of next-generation founders provide a valuable, context-specific understanding of the phenomenon of social identities and their venturing activities (Brinkmann & Kvale, 2014). Rather than aiming to capture a universal truth, we strive to provide a rich and nuanced understanding of their specific reality.
All the founders in the sample were raised in a German-speaking family that owned one or more family businesses. 3 Each informant had established one or more new ventures. Consistent with previous studies on new venture creation, we only incorporated start-ups in our sample with a maximum age of eight years (Fauchart & Gruber, 2011; McDougall et al., 1994). Furthermore, all next-generation founders included in our sample are part of Generation Y (i.e., born between 1981 and 1996). This ensured they were at comparable life stages when they established their ventures. Table 1 provides descriptive details about the next-generation founders sampled, their ventures, family firms, and corresponding identity types. Next, we describe our data collection and analysis method to demonstrate the robustness of our research.
Overview of Sampled Next-Generation Founders, Their Ventures, and Family Businesses.c
Refers to the next-generation founder’s age at the time of venture creation. b Refers to the number of employees. c Social identity types are indicated by font style: regular font = legacy preservers;
We identified next-generation founders using three supplementary strategies: (1) Introduction Through Entrepreneurial Students. We began our study by conducting interviews with next-generation founders introduced to us by students enrolled in a course we offered at our university. This course was intentionally designed for students with an entrepreneurial mindset, many of whom have been raised in business families. (2) Identification Through Family Business Magazines, Websites, and Conferences. We searched various public sources, including family business magazines (e.g., “wir” Magazine), several founder-related websites (e.g., www.junge-unternehmer.eu), and professional networks on the internet (e.g., LinkedIn). We also searched lists of next-generation members at conferences for next-generation business family members in Germany (e.g., “Juniorenkonferenz”). (3) Snowball Sampling. We also used snowball sampling to identify next-generation founders. At the end of each interview, we asked each informant to recommend other interviewees (Denzin & Lincoln, 2017; Von Hippel et al., 2009). To increase the diversity of our data, we encouraged suggestions by asking, “Whom do you know who has a different perspective?” (see Miles & Huberman, 1994).
Data Collection
This research incorporated data from various sources: (1) In-depth Interviews. Qualitative interviews were the primary source of data in this study. We conducted 46 semi-structured interviews with 35 German-speaking next-generation founders involved in 42 venturing cases. Interviews ranged from 35 minutes to 1 hour and 45 minutes. To maintain participants’ anonymity, we used pseudonyms throughout our study. As the interviewees were native German speakers, the interviews were conducted in German and subsequently translated into English. All interviewees were posed numerous open-ended questions, supplemented by several follow-up questions. This approach allowed for a thorough examination of the interviewees’ responses and follow-up questions that clarified their answers (Spradley, 1979). We consistently prompted participants to express and exemplify their ideas. The questions addressed the following topics: (a) the next-generation founders’ life and career path, including what led them to establish a new venture; (b) founders’ experiences in creating their ventures, including their founding motivations, how they developed and came up with their business ideas and new ventures, and the influence of various social groups on their new venture; (c) the family business, including the family and firm history and founders’ involvement in the family business; and (d) the business family, such as the founders’ experiences while growing up in the family.
In all interviews, the founders offered detailed biographical data as part of their personal, business, and family (firm) narratives, which extended beyond the inception of their venture. Collecting this background information was crucial to us, given the significance of identity to our theory. Example questions include: What was your experience growing up in a business family? What motivated you to become a founder? Why did you want to start your own business? How did you go about it? Participants were assured complete anonymity at the start of each interview to foster candidness. At the conclusion of the interviews, we invited participants to discuss matters they deemed significant to their business creation but had not yet been addressed. (2) Website and Archival Data. When possible, we analyzed publicly available materials related to the next-generation founder, their new ventures, and the family businesses. These materials included company websites, magazine articles, media interviews, podcasts, and other resources that could provide insights. These resources were invaluable for providing background information prior to an interview about the founder (e.g., founding motivation), the venture (e.g., venture stage), and the family firm (e.g., firm history). These materials also allowed us to expand and confirm the information provided by our participants for triangulation purposes (Denzin & Lincoln, 2017).
Data Analysis
Our review of SIT and the identity development of next-generation business family members indicates that the meanings inherent in a specific next-generation founder identity arise from social relationships and group comparisons. In addition, “since individuals ‘construct themselves’ to have a set of core characteristics that define their self-concepts” (Fauchart & Gruber, 2011, p. 940), participants’ statements during our interviews reflected their social identity orientations.
We conducted our analysis in four steps. First, following the guidelines of social identity researchers for coding and analyzing qualitative data (Gioia et al., 2012; Miles & Huberman, 1994), we systematically explored our transcribed interviews to investigate general social identity meanings, thereby addressing our research questions. Initially, our research questions aimed to gain a broad understanding of the factors shaping the social identity of next-generation founders. As our analysis evolved, we refined these questions to reflect the emerging identity types observed in the data. We analyzed the interviews line-by-line, applying first-order codes to statements that provided information about the social identity meanings the informants associated with being a next-generation founder (e.g., statements including “I,” “For me,” “From my perspective it is important that . . .”—see Table 2 for illustrative quotes). For this, we used the qualitative data analysis program MAXQDA 24, ensuring we remained close to the participants’ narratives. This analysis generated numerous primary codes relevant to our first research question on the social identities of next-generation founders. These codes captured factors such as pressure to uphold family traditions, desires to break free from familial control, inspiration from non-family entrepreneurial peers, and aspirations to outperform them.
Identity Considerations: Dimensions, Themes, Categories, and Quotes. a
Note. LEP = legacy preservers; INS = independence seekers; IDI = identity integrators.
All data were derived from semi-structured interviews; “w” indicates “supplemented with website data”; “m” indicates “supplemented with magazine articles”; “e” indicates “supplemented with media interview or podcast data.”
In the second step, we moved from first-order categories to second-order themes (Gioia et al., 2012), integrating the initial codes to capture broader patterns of social identity considerations (see Figure 1). This iterative process involved a continuous comparison between the data and identity literature, allowing us to develop secondary codes (themes). For instance, similar first-order categories such as pressure to uphold family traditions, responsibility to preserve family reputation, family mentorship, and family business values as guiding principles were summarized into the broader second-order theme “business family expectation and legacy.” Furthermore, during this stage, in line with general identity research, which posits that individuals often hold several, sometimes conflicting identities shaped by different social roles and contexts (Ashforth & Mael, 1989; Pratt & Foreman, 2000; Shepherd & Haynie, 2009; Stryker & Burke, 2000), we observed that (the interplay of) business family and non-family entrepreneurial identity considerations affected the social identity of the next generation as next-generation founders (see Figure 2) collapsing our secondary themes into two overarching identity considerations (i.e., overarching dimensions): business family and non-family entrepreneurial identity considerations.
Data Structure.
Social Identity Types of Next-Generation Founders.
In a third step, we began to intensively discuss an interesting observation we had made: when coding those identity-centered statements, we noticed some variance in the valence of the first-order categories (i.e., the different meanings associated with these categories). This triggered our curiosity. Accordingly, we began uncovering this variance in meanings through cross-case comparison. By classifying the data associated with first-order categories regarding their valence (e.g., the first-order category “Pressure to uphold family traditions” was coded as being high, low, or medium), we were able to derive different profiles of the social identity of next-generation founders (what we later called identity types). That way, every founder was associated with a different profile (e.g., the basic identity types represented in Table 3). We then compared how we classified each identity statement along every single of the 17 first-order categories and discussed any differences in our coding until we reached agreement (interrater agreement: .93). That way, it became more and more evident that three basic types of social identities of next-generation founders can be found in our data, which we subsequently termed “(business family) legacy preservers,” “(business family) independence seekers,” and “identity integrators” (see Table 3 for an overview of the profiles and Table 2 for representative quotes). As of course those identity types are not always reflected as pure types in our data (i.e., perfectly fitting to the profile in every single first-order category), we associated the cases with the basic identity type if at least 75% of the profile of first-order categories within every of the five second-order themes of a single case was in line with the typical profile. For example, if within the second-order theme “Business Family Expectation and Legacy,” at least three out of four first-order codes were rated as high/very important (Pressure to uphold family traditions = high; Responsibility to preserve family reputation = high; Family mentorship and guidance = not very important; Family business values as guiding principles = very important), this case was classified as “Legacy Preserver” despite the deviation in the first-order category “Family mentorship and guidance.”
Overview: Differences Between Identity Types.
Note. LEP = legacy preservers; INS = independence seekers; IDI = identity integrators.
In the fourth step, we tried to understand how the different social identity types of next-generation founders—legacy preservers, independence seekers, and identity integrators—are related to key venture creation activities. We created detailed profiles of each founder and their new ventures to explore this second part of our research question (i.e., the relation between founders’ social identities and new venture creation activities). This cross-case analysis allowed us to identify patterns linking founders’ social identities to their new venture creation activities. Following the same coding scheme as elaborated above (i.e., first-order codes, second-order themes, overarching dimensions; see Figure 1), we identified four key activities of venture creation: opportunity identification, business model development, resource mobilization, and strategic vision and growth (Figure 1). Next, we began to explore whether and how the key activities identified vary across the three social identity types. We arranged our observations according to the identified social identity dimensions, again exploring differences in first-order categories related to new venture creation activities based on the associated basic type of identity as outlined above (applying a threshold of 75% overlap with the typical profile presented in Table 5 across all second-order themes; intercoder reliability = .91). To enhance the robustness of our findings and ensure a comprehensive understanding, we also drew upon supplementary materials, such as the ventures’ websites, magazine articles, and other publicly available information for triangulation with our interview data whenever possible (see Table 5 for an overview and Table 4 for details regarding dimensions, themes, categories, and illustrative quotes).
New Venture Creation Activities: Dimensions, Themes, Categories, and Quotes. a
Note. LEP = legacy preservers; INS = independence seekers; IDI = identity integrators.
All data were derived from semi-structured interviews; “w” indicates “supplemented with website data”; “m” indicates “supplemented with magazine articles”; “e” indicates “supplemented with media interview or podcast data.”
Overview: Differences Between New Venture Creation Activities Based on Identity Types.
Note. LEP = legacy preservers; INS = independence seekers; IDI = identity integrators.
Findings
Social Identity Types of Next-Generation Founders
Figure 1 shows our identified first-order codes, second-order themes, and aggregate theoretical dimensions (Gioia et al., 2012). Our data revealed that the social identity of next-generation business family members as founders is essentially shaped by two primary identity considerations: business family and non-family entrepreneurial. The business family identity is influenced by three key factors (i.e., second-order themes): business family expectation and legacy, desires for independence from the business family, and vision of a legacy beyond the business family. These considerations reflect the complex interplay between the individual’s ties to the business family and their aspirations to either uphold or redefine the family legacy. On the contrary, the non-family entrepreneurial identity is shaped by non-family peer influences and comparisons with other non-family organizations. These considerations highlight the impact of external entrepreneurial ecosystems and peer networks on the social identity of next-generation founders, guiding their identity formation in ways that may diverge from family traditions.
The interplay between these family and non-family identity considerations results in the emergence of three distinct types of next-generation founder identities (see Figure 2): legacy preservers, independence seekers, and identity integrators. Legacy preservers are those next-generation founders who strongly align with the business family identity, striving to maintain and enhance the family legacy through their entrepreneurial endeavors. Independence seekers prioritize their non-family entrepreneurial identity considerations, focusing on establishing ventures that differentiate themselves from the family business and reflect their family-independent aspirations. Finally, identity integrators navigate the tension between these two identity considerations, blending elements of the family legacy with their personal entrepreneurial vision to create ventures that honor both their heritage and desire for innovation.
Next, we describe those three types of social identity in more detail, based on our data analysis. We offer illustrative evidence in Table 2 to further demonstrate how our data led us to discover this typology. In addition, we describe particularly salient key characteristics, including several “power quotes” (Pratt, 2008, p. 501) for all three identity types below, which further exemplify our findings on the social identity typology of next-generation founders.
Legacy Preservers
The first social identity type of next-generation founders observed in our sample is the legacy preserver, with the majority (7 out of 8) being of T1 (connected to the business family but formally independent of the family business; Minola et al., 2021). This social identity is characterized by a stark overlap between the business family identity and the non-family entrepreneurial identity (with the latter being less or almost not present), resulting in minimal perceived conflict between the two (see Figure 2). In other words, legacy preservers seem to adopt the business family identity and make it their own, which is reflected in an almost absent impact of non-family identity considerations.
Legacy preservers feel strong pressure to uphold family traditions because of their emotional closeness to the family business. They hold themselves responsible for preserving the family’s reputation, as the business has always been an integral part of their lives since childhood. This is reflected in the fact that succession for most of them remains a likely option, despite their own ventures, which they often view as preparation for their future role in the family business and as part of their entrepreneurial identity as founders. Tom (ID30), for instance, recalled being “constantly present in the family firm as a child” (ID30, 1B), and he added, “We always talked business at the dinner table, and from a young age, I felt like I was already part of the company, even before I had a formal role” (ID30, 1A). Furthermore, family members serve as important reference points for their self-concept, as reflected in the strong mentoring role they play, and family business values are deeply ingrained in their identity. Lisa (ID22) remarked, “Our family values are at the heart of everything we do. It’s not just about the business—it’s about preserving who we are as a family for future generations” (ID22, 1D). She continues, There have been moments when family clearly took precedence over the business, like when my father dropped everything during an important meeting to help me with a personal issue. It shows that, despite the business being important, family always comes first. (ID22, 1A)
This highlights the business family’s central role in shaping their social identities as next-generation founders, resulting in minimal engagement with non-family entrepreneurial peers and organizational setups of other new ventures, eventually leaving little room for entrepreneurial identity considerations outside of the business family context. Legacy preservers have no desire to break free from family control, which they do not perceive as a burden to their founder identity. Building a personal legacy is less central to how legacy preservers see themselves than their willingness to contribute to the entrepreneurial success of the entire family: “I would say I am a proud member of our family. I am proud of what we have achieved as an entrepreneurial family and that’s why I want to leave my own footprint on that successful pathway” (ID18, 3C). Accordingly, legacy preservers do not perceive a lot of identity struggles between their personal autonomy and loyalty toward the family, which is reflected in a very high openness toward future leadership roles in the family business as part of their social identity. Tom (ID30) reflected, “The family comes first, and our well-being depends on the company’s success. For me, business and family are the same” (ID30, 1B). Creating a personal legacy beyond the business family is not an important part of this identity type, nor is radical innovation ingrained in their social identity. The need for reach and influence is primarily focused on the business family, driven by the intention to leave a lasting footprint in the family legacy. Luke (ID31) shared, “The responsibility I feel is not only toward the business but toward the generations that built it before me. I can’t simply walk away from something that’s so deeply tied to our family identity” (ID31, 1A). This sense of duty underscores the deep emotional connection to the family legacy, a sentiment that often overrides the pull of external entrepreneurial identity considerations. At the same time, inspiration from non-family entrepreneurial peers, or an aspiration to outperform other start-up founders, is not an integral part of their self-perception: My grandpa is definitely the most important source of inspiration for me. The stories I know from him and about him encourage me to push things forward, to be brave, to endure, and to build something that lasts. Beyond that, there are different entrepreneurs I look up to, but in the end, the way my father approaches entrepreneurial challenges is where I for sure learned the most—and still do. (ID21, 4A)
This family-firm-focused self-concept is further reflected in networking efforts that concentrate on other business families (and not on other founders). The conviction that learning about cultural aspects can be best done in the business of the family limits the adoption of cultural aspects from other start-ups, which are mostly perceived as not fitting to their entrepreneurial identity: Networking is vital. I regularly attend conferences for entrepreneurial families, where I feel the same attitude toward business. On the contrary, I increasingly avoid start-up festivals and similar events as there are too many people around with almost no experience and a lot of bullshitting around a quick exit, an attitude I do not like at all. (ID9, 5A)
In the end, legacy preservers ground their social identity in their motivation to contribute to the family’s legacy, even when creating a new venture. In line with this identity, such ventures are expected to help sustain the family legacy—for example, by later integrating the venture and/or the learnings into the family business: “I feel that it makes perfect sense to create a start-up that might help in extending the family business in the future” (ID33, 5C). This motivation becomes especially evident when examining the kinds of ventures legacy preservers create and the purposes these ventures serve within their broader business family-enterprise system. By creating ventures outside but in close connection to the family business, they seek to sustain the family’s entrepreneurial vitality and adapt it to changing environments without, in the first place, altering the core organization itself. This pattern illustrates that, for legacy preservers, new venture creation is primarily motivated by the intention to extend and future-proof the family’s entrepreneurial legacy. In practice, their ventures typically serve as complementary initiatives that explore adjacent markets, technologies, or organizational models that could later be integrated into the family firm or enhance its long-term resilience. Some even establish firms that directly support the family business through resource sharing or functional extension. One example is next-generation founder Joe, who launched a recruiting company in response to persistent hiring challenges within the family business. By creating a separate venture that also serves external clients, he established a steady pipeline of skilled workers for the family business while building a viable company in its own right. As Joe explained, It was quite difficult to attract enough people for our family business. So we decided to build our own recruiting company. Through it, we now have much better access to qualified staff—both for our family business and for external clients. (ID21, 5C)
By founding a new venture outside the family firm, legacy preservers gain the autonomy and flexibility to experiment with ideas that would be difficult to realize within more formalized structures, while remaining aligned with the family’s values and long-term vision. As Avery noted, “Starting my own company gave me the chance to explore new approaches that could later feed back into our family business. It’s a way to move things forward without changing what has always made us strong” (ID3, 1D). Avery founded a sustainable leather goods label that repurposes high-quality leftover leather from his family’s furniture manufacturing business. This initiative reflects his desire to innovate while reinforcing the family’s legacy of craftsmanship. These examples illustrate that, for legacy preservers, new venture creation is a strategic instrument to preserve, renew, and strengthen the family legacy.
Independence Seekers
Independence seekers are the second type of next-generation founder identity observed in our sample, with the majority (10 out of 13) being associated with T2 (fully independent of both the family business and the business family; Minola et al., 2021). Their social identity is marked by ongoing tensions between the expectations imposed by the business family and their own non-family entrepreneurial aspirations beyond it. The business family’s expectations and legacy are often experienced as restrictive, with the weight of family traditions and expectations creating a sense of constraint that fuels their desire for independence from the business family.
Independence seekers only have limited exposure to and emotional bonds with their family’s business, which limits their opportunities to integrate family business values into their self-concepts. Preserving the family reputation is not a key aspect of their social identity, nor is seeking support (in terms of guidance or resources) from family members an option, as independence seekers intentionally position themselves as autonomous players. This independence is an integral part of how they see themselves: “I think a start-up is very different from a family business—it is more about growth, about scaling, about a successful exit and then doing the next thing” (ID2, 1D). Independence seekers want to break free from family control; they have a strong motivation to build a personal legacy, to leave a strong footprint in the world, and they are striving for impact in an (emerging and/or different) industry. Anna (ID25) reflected, “I wanted to free myself from my predefined path” (ID25, 2A), adding: “My father had his own way of doing things, but I wanted to build something of my own, even if that meant distancing myself” (ID25, 2B). Toward a similar direction Levi (ID29) shared: “There was always that pressure—external and internal—to step out of the shadows and make my own mark. But it’s not easy when the family has such a strong legacy and expectations” (ID29, 2C). Thus, being an innovator, driving change and experimentation, and co-creating the future is key to their identity. “I see myself as a creative destructor. I want to test boundaries, see the future, try new things, to stay curious. So, for myself, innovation is the key driver to get out of bed every day” (ID2, 3B). Their identity referents and role models are accordingly mainly located outside the business family, and the perception that personal autonomy can only be reached at the expense of family loyalty is a core component of how independence seekers see themselves: “I want to have my own career, independent of my family, independent of the existing business. People should know me for my own achievements, not for family membership” (ID16, 3A). This is also reflected in a strong resistance to taking over a role in the family business, a stance that forms an integral part of their identity. Instead, their identity is grounded in being an essential part of the (non-family) start-up community and in a strong desire to exchange and learn from other (non-family) founders, which in turn shapes their self-concept. Caleb (ID27) emphasized, “I made a conscious effort to rely on [family-]external entrepreneurial networks (ID27, 4A) and advice from mentors outside the family. (ID27, 1C) This independence helped me build something entirely my own” (ID27, 4C). Finally, independence seekers show a strong need for strategic differentiation from the family business—being entrepreneurially active in entirely different domains—as part of who they are or want to be as founders. This tendency is likely rooted in the perceived burden of family expectations and legacy, leading them to avoid any possibility of comparison with family members or the family business: I think the family members do not really know much about my start-up. Which is not a problem at all, as long as my co-founders and the folks in the start-up community see how hard I push and what I can contribute. (ID8, 4B)
Similarly, Anna (ID25) noted, “It wasn’t easy for my family to see me taking a different approach, but I needed to show that I could succeed on my own terms” (ID25, 4B). This dynamic leads to a social identity that prioritizes differentiation and the establishment of a personal legacy distinct from the business family, driven by a strong desire to assert independence and embrace entrepreneurial paths free from the constraints of family expectation and legacy.
Identity Integrators
The third type of next-generation founder identities in our sample is the integrator identity, with five out of 14 being T1 and nine out of 14 being T2 ventures (Minola et al., 2021). Integrators skillfully balance the interplay between business family considerations and non-family entrepreneurial influences. Their social identity is shaped by integrating aspects of the family’s legacy while embracing diverse perspectives gained from non-family networks and comparisons.
Identity integrators feel some pressure to uphold family traditions and are often emotionally or location-wise close to their families, while their self-concept leaves room for outside options. Robert (ID6) described this balance: “I grew up in the family business, but at the same time, I knew I wanted to explore other avenues outside of it. (ID6, 1A) It’s not about leaving behind the legacy but bringing new ideas to evolve it” (ID6, 3B). While they feel responsible for the business of the family, often shaped by work experience within it, they see themselves as having both roots and wings. This is reflected in their openness to support from family members and other founders alike, whether financially or through mentoring, merging the best of both worlds whenever it makes sense. This pragmatic approach is an integral part of their social identity. Kate (ID23) echoed this sentiment: “I come from a family business background, but working in hospitality and starting my own venture showed me how to merge those foundational values with modern, global ideas” (ID23, 1D). This composed nature is also evident in how they integrate family business values as guiding principles into their self-concept. Some family-related values are central to their entrepreneurial identity, while others are less prominent or replaced by values inspired by non-family experiences and observations: Of course, I bring many values from the family business into my venture—such as respect, cohesion, and trust—but at the same time, a flat hierarchy and a strong emphasis on innovation and experimentation are essential to me, which, frankly speaking, I miss in our family business. (ID15, 1D)
Identity integrators to some extent define themselves by doing their own thing and stepping out of the family control zone. At the same time, they can communicate this self-concept in ways that keep other family members on board, thereby avoiding a struggle between personal autonomy and family loyalty as part of their identity: I simply wanted to do my own thing—and my father understood it when I told him that he himself does his own thing, too. So, there wasn’t any kind of conflict, but rather mutual respect for our independent pathways in the end. (ID12, 2A)
The trust in being able to balance expectations from others with their own is an important part of identity integrators’ self-concept. This is also reflected in how succession is integrated into their social identity. Taking over the family business is not their preferred option, yet it is not explicitly ruled out either, leaving room to imagine themselves both as successful founders or as potential family firm successors in the future: I guess it is highly unlikely that I will play a role in the family business in the future, but you never know. As long as there are other options besides myself, it is very unlikely, but in case of an emergency, I might jump in. (ID23, 2D)
At the same time, identity integrators are driven by a strong desire to leave a personal legacy beyond the family legacy, emphasizing the reach and impact they strive to achieve. Innovation forms a central component of their self-concept, as Kate (ID23) explained: “It’s about respecting the past but being unafraid to innovate” (ID23, 3B). Identity integrators are open to inspiration from non-family peers and value networking and learning from other founders. At the same time, they show similar openness toward family members—again, the attitude of “integrating the best of both worlds” is formative in shaping their social identity. Accordingly, this self-concept implies that strategically differentiating their start-up from the family business is not a defining aspect of how identity integrators perceive themselves. What matters to them is that the venture succeeds, regardless of whether it resembles or diverges from the family business, reflecting their balanced approach toward the family legacy and related expectations. As Vincent (ID12) puts it, I learned a lot about entrepreneurship from my family. My parents were supportive of me trying something on my own, but it was the exposure to the start-up culture at [university] and my experience working in a start-up that really shaped my decision. (ID12, 4A) Being part of that environment showed me that I wanted to pursue my own venture. Working in the start-up allowed me to network with other entrepreneurs (ID12, 5A), learn from their approaches (ID12, 5B), and differentiate my strategies. (ID12, 5C)
Overall, their identity is characterized by a flexibility that allows them to respect and innovate within the framework of the business family’s legacy, creating a cohesive sense of self that bridges family and non-family entrepreneurial spheres.
Similarities and Differences Between Identity Types
Table 3 provides an overview of the similarities and differences between the three identity types. Regarding the overarching dimensions of business family identity and non-family entrepreneurial identity considerations, it becomes evident that legacy preservers essentially draw exclusively on the business family identity, as reflected in nearly all first-order categories and second-order themes. Non-family considerations play virtually no role in shaping their social identity as start-up founders. In contrast, independence seekers draw almost exclusively on non-family entrepreneurial identity considerations, with business family-related aspects playing only a minor role. One notable exception is their strong aspiration to leave a legacy beyond the business family, which profoundly affects their self-concepts as founders. This consideration is far less influential for legacy preservers. Most interestingly, identity integrators uniquely blend elements of the social identities of legacy preservers and independence seekers. Their self-concept reflects both business family and non-family entrepreneurial considerations, each playing a meaningful role. Rather than emphasizing one sphere over the other, identity integrators tend to balance elements from both worlds, showing moderate rather than extreme orientations toward either family or non-family identity considerations. In doing so, they selectively draw on aspects from both overarching dimensions in their own social identity formation, while never accepting them as unquestioned influences. In more detail, identity integrators exhibit elements in their identity that are closely aligned with those of legacy preservers. These include the impact of business family expectations and legacy, the low perception of struggles between personal autonomy and family loyalty, the low resistance to taking over the family business, and the low need for strategic differentiation from the family business. In contrast, other elements closely resemble identity considerations of independence seekers, particularly the importance of envisioning a legacy beyond the business family and the influence of non-family peers and organizational comparisons on their social identity. Overall, while legacy preservers focus almost exclusively on the family to construct their social identity as founders, independence seekers (often deliberately) ignore (or even deny) identity considerations from the business family and consider non-family peers and other start-up organizations as their primary identity referents for their social identity as founders. Both share a tendency toward a comparably extreme orientation, with legacy preservers focusing almost exclusively on family considerations and independence seekers on non-family ones. Identity integrators blend different elements of both realms to construct their own social identity as founders, and they seem to mostly avoid extreme positions. In other words, they do not adopt all elements from either sphere but selectively incorporate certain aspects into their social identity as founders.
Similarities and Differences in New Venture Creation Activities Between Identity Types
Based on the SIT framework, individuals’ identities relate to their behaviors and actions. Therefore, in the context of this research, we expect that, for example, next-generation founders with a legacy preserver identity would behave and act in ways that correspond with the meanings this identity type attributes to being a next-generation founder. Aligned with this SIT premise, our data show that next-generation founders with different social identity types vary systematically in key new venture creation activities, including opportunity identification, business model development, resource mobilization, and strategic vision and growth (see Table 4 for a detailed comparison of new venture creation activities, including illustrative quotes, across the three social identity types).
Table 5 provides an overview of the similarities and differences among the three identity types in terms of their new venture creation activities. Notable differences emerge across all activities, ranging from opportunity identification to business model development, resource mobilization, and strategic vision, though the extent of these differences varies. Legacy preservers and independence seekers, consistent with their social identities, tend to adopt more polarized approaches, very often in opposite directions. In contrast, identity integrators display a more balanced pattern, sometimes aligning with legacy preservers, sometimes leaning more toward independence seekers, but generally favoring a middle-ground approach that avoids extremes. Illustrative vignettes of selected cases, highlighting these patterns in practice, are provided in Appendix A.
Opportunity Identification
For legacy preservers, whose social identity is primarily rooted in business family considerations, the family business and/or the voice of their families are actively involved in opportunity identification and selection: “Back then, I was the head of strategic processes in our family firm. My task was to evaluate and prepare a topic related to betting. After gathering all the information, I decided I wanted to pursue this on my own, so I went to my mother and said, ‘Okay, I have invested so much time in this topic, I want to do this independently.’” ID30, 6A.
In contrast, independence seekers—consistent with their emphasis on non-family identity elements—tend to exclude or even deliberately avoid family involvement in opportunity identification, whereas integrators’ balanced consideration of family and non-family elements is reflected in a more nuanced approach to identifying opportunities. Both independence seekers and identity integrators show a strong desire for innovation, although integrators seek to balance innovation with tradition and the family legacy. In contrast, for legacy preservers, incorporating a focus on contributing to the family legacy and tradition is central in opportunity identification: From my point of view, tradition is a huge resource, so I try to leverage the tradition of our family business in the venture as well, which ensures in the end a good fit of the start-up to the family business. Innovation is important, but it should be possible to connect it to the heritage of our business family, where we always strive for a balanced, step-wise approach when it comes to innovation. (ID18, 6B)
Business Model Development
Legacy preservers and integrators both seek to integrate family values and business practices into their venture models, yet they pursue this integration through different approaches. Consistent with their social identity, legacy preservers view the business models, practices, and values of their family business as the primary role model for their own ventures: The values I grew up with are of course important in my venture as well—in that regard, I would say the value base of my start-up is very similar to that of the family business, somehow there is a strong cultural fit. (ID18, 7A)
Integrators pursue this integration in a conscious and balanced manner, incorporating non-family values as well: Importantly, the values that guide our startup—integrity, loyalty, sustainability, and societal responsibility—are deeply rooted in the principles I learned growing up in my family. When you start your own firm, additionally, your personal values naturally blend into the company, allowing you to create a work environment that reflects those ideals, unlike in other settings [like in the family business] where you might have to compromise. (ID4, 7A)
Conversely, independence seekers often strive for maximum divergence from family business practices, a tendency also reflected in their choice of industries and locations that differ from those of the family business.
Legacy preservers show only limited divergence from practices observed in their family businesses. They tend to adopt a cautious approach toward digital or modern business strategies, as Alex explained: There is no value in doing things differently in order just to do them differently—I would say we are not the first to make use of digital possibilities while on average we do it earlier in the new venture [in comparison to the family business] but that’s because we do not need to change a running system as we build the company from scratch, so we can simply give it a try. (ID33, 7C)
By contrast, digital possibilities and modern business strategies are essential elements of the business models of independence seekers (“The adoption of digital strategies was essential from the start, particularly our decision to focus on the global smartphone market. You need to be fast and brave about new possibilities” ID2, 7C) and identity integrators (“I always tell my parents that companies need to be managed differently nowadays—as I observe in my venture, employees demand higher flexibility these days if you want to retain them in the long run.” ID24, 7C) alike.
Resource Mobilization
Legacy preservers place strong value on family support in mobilizing resources, whether through using family business resources (“Of course, that’s a huge advantage. The entire infrastructure—warehousing, logistics—I didn’t have to figure out how to manage these things myself, such as setting up a third-party fulfillment provider. We already had everything here. We had an ERP system, a software infrastructure. I even started by taking two of our family business’s trainees and said, ‘Hey, would you like to help write some invoices for a startup?’” ID31, 8A), mentoring, or funding from family members. External financing or accessing non-family networks is not seriously considered (or at least with a very low priority): By focusing on the network connected to the family business, I was able to secure my first ten customers, all of whom were entrepreneurs in the region I already knew. This trust and continuity, rooted in personal relationships, helped us start with immediate customers and profits. (ID21, 8E)
Independence seekers (but to some degree integrators as well), by contrast, choose the opposite approach, reflecting the importance of non-family factors in their social identity. For example, when it comes to the use of family business resources and funding, independence seekers often actively avoid using those family resources and instead strive for non-family resources (“Investors have become important quite quickly to scale the company—it was essential for me that these investments didn’t come from the family side. I wanted to show that I could do it on my own.” ID5, 8B). Identity integrators, in line with their distinctive social identity, show a more pragmatic view, combining both approaches. While striving for independence, they remain open to selective family support when it aligns with their entrepreneurial needs: I definitely tried to solve most of the issues on my own, but at the same time, I could always rely on my family’s help. When I needed to cover costs for new bottling or storage, my grandfather offered me space in an old bowling alley, and my mother lent me money for bottles. (ID1, 8A)
Strategic Vision and Growth
Legacy preservers and identity integrators both display a strong temporal orientation toward the long term, whereas independence seekers strive for short-term options (e.g., by focusing on clear exit strategies from the start): Our goal was always to create something larger, to be our own bosses and build something we believed in, with an eye toward a future exit. We never intended to run a small operation forever just to earn a nice salary; our vision was always to achieve something significant on both a personal and professional level. (ID27, 9D)
While for preservers and integrators, the continuation of the family legacy is crucial, the strategic vision of independence seekers does not consider legacy elements. Finally, while legacy preservers do not prioritize innovation and growth and avoid expanding the business beyond the family business scope, both independence seekers and integrators pursue precisely this path. They aim to expand their new ventures beyond the boundaries of the family business, with innovation and growth being particularly central strategic goals for independence seekers (“It is very important to grow, and innovation is key to ensure growth. Over time, we expanded our efforts to reach new and unknown customer segments, leveraging new technologies and engaging customers through innovative e-commerce strategies.” ID5, 9C). In addition, and in line with their balanced social identity, identity integrators pursue these goals more moderately and deliberately: Building a new venture is definitely about innovation and growth—that is the number one reason why you create a start-up in the first place, from my point of view. But you should not overpace if you want to be successful in the long run. (ID28, 9C)
In summary, legacy preservers’ key activities in new venture creation—opportunity identification, business model development, resource mobilization, and strategic vision and growth—reflect the centrality of the business family identity in their self-concept. These activities are deeply rooted in family traditions, focusing on continuity and incremental innovation. In contrast, and reflecting their distinctive founder identity, independence seekers prioritize more radical innovation, differentiation, and future-oriented growth strategies, often breaking away from the family’s legacy in how they approach entrepreneurial challenges. Identity integrators, in line with their social self-concept as a start-up founder, skillfully balance tradition and innovation, drawing on both family and external influences to create flexible business models and sustainable growth strategies that honor the past while embracing modern trends. This comparison underscores how varying degrees of overlap or conflict between family and non-family identity considerations shape entrepreneurial actions.
Theoretical Implications
First, by drawing on social identity theory (SIT), we introduce a thus far largely unconsidered social psychological lens to understand the heterogeneity of social identities among next-generation founders. This leads to a unique contribution by revealing how these identities are not solely shaped by family dynamics and legacies but also by non-family entrepreneurial ecosystems. Before applying SIT, the literature predominantly focused on how family dynamics, such as communication patterns (Prügl & Spitzley, 2021), cohesion and flexibility (Combs et al., 2021), and family embeddedness (Hahn et al., 2021; Pittino et al., 2018), shape next-generation new venture creation activities. Through SIT, however, we were able to uncover how next-generation founders’ social identities are also affected by family-external identity considerations. While these family-external factors have recently gained attention in the context of succession literature (Bika et al., 2019), they still remain underexplored by research on next-generation venturing. For instance, Combs et al. (2021) highlight the importance of the next generation’s entrepreneurial education in becoming entrepreneurially active in the first place. The present study nuances this finding by explaining how non-family entrepreneurial influences shape the social identities as next-generation founders and, thereby, their venture creation activities after deciding to create their own, formally independent enterprises. This shift in perspective advances our understanding of how family-external factors contribute to shaping next-generation founders’ social identity formation and their venture creation activities. For instance, SIT enabled us to see how identity integrators leverage both family traditions and external entrepreneurial networks to navigate and balance various, partly competing, social identity considerations. This extends existing discussions on the creation of new ventures of the next generation by considering influences beyond the business family unit. Furthermore, we identified a typology of three distinct social identity types: legacy preservers, independence seekers, and identity integrators. These types resonate with established findings in the transgenerational entrepreneurship literature—such as legacy preservers, which seem to connect to the work on entrepreneurial legacies (e.g., Barbera et al., 2018; Combs et al., 2021; Radu-Lefebvre et al., 2020). Independence seekers are somehow echoed in the literature on next-generation external venturing practices (e.g., Combs et al., 2021; Prügl & Spitzley, 2021; Ramírez-Pasillas et al., 2021), and similarities to the identity integrators in this paper broadly relate to those described in the context of entrepreneurial opportunity exploitation (Shepherd & Haynie, 2009) and familial entrepreneurial teams (Discua Cruz et al., 2013). At first glance, the activities of legacy preservers may resemble those of portfolio family entrepreneurs (Sieger et al., 2011), as they establish new ventures alongside or in connection with the family firm. However, unlike portfolio entrepreneurship, which is primarily driven by goals of diversification and growth, legacy preservers pursue new venture creation as a means of sustaining and renewing the family’s entrepreneurial legacy. Their ventures expand the family’s entrepreneurial portfolio, but the underlying rationale is identity-driven rather than opportunity-driven. In this sense, our findings conceptually connect research on portfolio family entrepreneurship and entrepreneurial legacy, showing how next-generation founders preserve continuity through entrepreneurial renewal beyond the boundaries of the core family firm.
Second, our study further contributes to the literature on next-generation transgenerational entrepreneurship and venturing by demonstrating how these identity types directly shape key elements of new venture creation activities. While previous research has largely emphasized “why” and “how” decisions are made to either take over or diverge from the family firm (e.g., Combs et al., 2021; Hahn et al., 2021; Pittino et al., 2018), our study focuses on what happens after the decision to create a new and formally independent venture is made. We provide a detailed account of how founders’ social identities guide the creation and evolution of their ventures, offering a new lens through which to understand entrepreneurial action in family business contexts. We achieve this by showing how the intersection of family and non-family entrepreneurial influences shapes business outcomes. A significant theoretical contribution emerges from focusing on how these social identity types relate to new venture creation activities, which has been underexplored in transgenerational entrepreneurship research. With one exception focusing on how the next generation establishes its new ventures once having decided to do so (Ramírez-Pasillas et al., 2021), research has remained silent on this phenomenon. Ramírez-Pasillas et al. (2021) reveal various routes that next-generation family members take when establishing external new ventures, focusing on how they pursue autonomy from the family business. Our study extends this work by examining the specific venture creation activities associated with different social identity types of next-generation founders. We highlight how founders with distinct social identities approach key entrepreneurial tasks, including opportunity identification, business model development, resource mobilization, and strategic vision and growth. Thus, our study contributes to a more detailed understanding of how next-generation founders create their ventures, expanding beyond venturing routes to capture the specific entrepreneurial practices shaped by their social identities as founders.
Third, our study contributes to furthering our understanding of the perspective and multiple roles of the next generation in business families. So far, our knowledge of the diversity of roles the next generation of family firms is taking on beyond leadership succession is limited. Research on the next generation of business families has primarily focused on intergenerational leadership succession (Björnberg & Nicholson, 2012; Zahra & Sharma, 2004), a theme that remains one of the most prevalent in family business research today (Benavides-Velasco et al., 2013; Siaba & Rivera, 2024). This focus is not surprising given that transferring leadership power to the next generation “is one of the most critical events of any family firm (. . .)” (Richards et al., 2019, p. 330). As scholars increasingly begin to acknowledge the diversity of entrepreneurial roles that may be taken on by next-generation business family members, they increasingly recognize the family as the relevant level of analysis for family firm longevity and value creation across generations (Habbershon et al., 2010; Habbershon & Pistrui, 2002; Nordqvist & Melin, 2010; Zellweger et al., 2012). For instance, Hahn et al. (2021) and Pittino et al. (2018) examined how family embeddedness factors and personal attitudes and motivations affect the next generation’s decision to succeed in the family business or establish their own new ventures. We contribute with our study by focusing on the entrepreneurial role of the new venture founder, a career path becoming increasingly popular among next-generation members (Prügl et al., 2023; Sieger et al., 2021, 2023). This may be because creating new ventures allows individuals to express themselves freely and act in line with their identities (Fauchart & Gruber, 2011), which is not always possible when taking the formal role of the leadership successor within the family firm (e.g., Garcia et al., 2019; Huang et al., 2020; Radu-Lefebvre & Lefebvre, 2024). In addition, some next-generation members consider the experiences gained while establishing their own new ventures as preparation for their succession in the family business (Riar et al., 2022) or as a means to pursue entrepreneurial opportunities independently of the family enterprise (Combs et al., 2021; Pittino et al., 2018; Ramírez-Pasillas et al., 2021). Contrarily, taking on the more traditional entrepreneurial role of the family firm successor is decreasing in popularity among the next generation worldwide (Zellweger, 2017; Zellweger et al., 2015), rendering a better understanding of alternative routes to entrepreneurship timely and important.
Implications for Practice
This study offers several practical implications for next-generation founders, family business advisors, and family firms navigating the challenges of new venture creation. First, by identifying distinct social identity types—legacy preservers, independence seekers, and identity integrators—we provide family business stakeholders with a framework to better understand the diverse motivations and aspirations of next-generation founders. This understanding can help families tailor their support, succession planning, and mentoring strategies to align with the social identities of the next generation as founders, fostering more effective and supportive environments. For next-generation founders, our findings offer valuable insights into how their social identity considerations can shape their new venture creation journey, encouraging them to reflect on navigating family expectations and family-external influences. In addition, family business advisors can use these insights to guide discussions around balancing tradition with innovation and design more customized leadership development and venture incubation programs. This can assist family businesses in ensuring long-term sustainability and adaptability in increasingly competitive markets while also helping next-generation founders carve out entrepreneurial paths that honor their heritage yet embrace new opportunities for growth. Furthermore, comprehending the unique patterns of the next generation’s new venture creation would enable potential external investors, such as venture capitalists or business angels, to accurately evaluate the competitive advantage or growth potential of these new businesses (Minola et al., 2021).
Limitations and Future Research
This study offers valuable insights into how social identity shapes venture creation activities of next-generation business family members, while it also has several limitations that warrant attention and suggest avenues for future research. First, our reliance on a qualitative, interview-based approach provides in-depth insights, but it also limits the generalizability of our findings. While our sample captures rich narratives, it may not fully represent the diversity of next-generation founders across different industries, cultures, or business family structures. Future research could build on these findings by using larger, more diverse samples and employing quantitative methods to test the robustness of our proposed identity types. One promising approach would be to apply fuzzy set Qualitative Comparative Analysis (fsQCA) to examine how various combinations of social identity factors contribute to similar entrepreneurial outcomes. Such an approach would also allow scholars to address the question of equifinality, that is, whether different social identity configurations can ultimately lead to equally successful outcomes (e.g., in terms of sales, number of employees, growth rates, innovation, internationalization, long-term viability) 4 or whether they are associated with distinct performance outcomes. FsQCA thus represents a particularly suitable method to explore these multiple pathways and the complex interplay of factors that shape next-generation founders’ new venture creation activities.
Second, while our study provides a snapshot of social identity types at a particular moment, longitudinal research could offer more dynamic insights into how these identities evolve, particularly in response to changes in family dynamics, market conditions, and entrepreneurial opportunities. Such research could track how the social identities of legacy preservers, independence seekers, and identity integrators shift as they confront different entrepreneurial challenges or family succession issues. In addition, future research should explore the nuanced and context-dependent relationship between social identity types and new venture creation activities. Thus, while identity plays a crucial role in shaping entrepreneurial activities, its influence may fluctuate depending on factors such as market conditions, resource availability, and external pressures. Considering these issues together, future studies could benefit from exploring these aspects by theorizing from process data (Langley, 1999). Furthermore, extending our analysis to different cultural contexts would be valuable. Family businesses and entrepreneurial identities are often shaped by cultural norms (House et al., 2004; Laspita et al., 2012), and future studies could explore how these identity types manifest in non-Western settings, where family structures and expectations, as well as the perception of family firms, may differ significantly from those in our sample (Jaufenthaler et al., 2023).
Finally, while our study focused on next-generation founders in the context of new venture creation, scholars are invited to explore the multiple entrepreneurial roles the next generation may occupy by discontinuing to equate next-generation members with family firm successors. The next generation can assume various entrepreneurial roles inside and outside the family firm: Besides being leadership successors, next-generation members can become active on the advisory board of the family business (Bruehl & Lachenauer, 2018); engage in the professionalization of the family’s asset management, that is, the family office (Welsh et al., 2013); become entrepreneurially active within the confines of the family firm, thereby engaging in corporate venturing activities (Prügl & Spitzley, 2021); participate in the family firm’s charity operations, such as leading the family foundation (Schillaci et al., 2013); or become active in the family council (Bruehl & Lachenauer, 2018). Their formal role in the family business may also be limited to ownership, for instance, as shareholders, while simultaneously pursuing entrepreneurial or other careers outside the family business, such as founding new ventures. They may also pursue (entrepreneurial) careers in family-external companies and organizations, whether family-owned by other families or publicly held (e.g., Prügl et al., 2023; Sieger et al., 2011). Notably, the entrepreneurial roles of the next generation can evolve; for instance, next-generation members may establish their own, independent new ventures after graduating (i.e., choosing a formal role outside the family business) and later choose to succeed in the family business (i.e., choosing a formal role inside the family business). In addition, they may occupy multiple roles simultaneously, leaving room for crucial future research on the different roles of the next generation of business families.
Taken together, our findings reveal three distinct ways in which next-generation founders make sense of who they are as founders of their own new ventures—those who preserve the legacy of the family (business), those who seek independence from it, and those who integrate both worlds. These social identities fundamentally shape how they create and develop their own new ventures, helping to explain the heterogeneity of entrepreneurial paths emerging from members of the next generation of business families today.
Footnotes
Appendix A
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
