Entrepreneurial new ventures have limited resources, where the choices as to how to use those resources can mean the difference between venture survival and failure. At the same time, their development is shaped by the institutional environment and how they interact with that environment. One important way that ventures engage with their institutional environment, specifically governmental officials and the laws and regulations they enact, is through lobbying. But what drives ventures to realize the need to invest their limited resources in lobbying efforts? We theorize that critical events or key advisors can provide an impetus for ventures to recognize the need to lobby—an effect we term entrepreneurial lobbying activation. Specifically, we consider lawsuits and the role of advisors through venture capitalists’ involvement with lobbyists as key factors triggering entrepreneurial lobbying activation. We find support for our hypotheses, contributing to the entrepreneurship literature, especially in relation to institutions and venture capital, as well as to the literature on lobbying.
