The appropriate legal and organizational format used to establish a new venture will vary according to several factors such as context, people, legal and tax consequences, and cultural and social norms. In this chapter, we consider the various organizational and legal forms that entrepreneurs employ to achieve their objectives. New ventures can range from small business or consulting services to high-growth, high-impact enterprises. When entrepreneurs establish a new enterprise, they must make some critical decisions about these matters. Important social enterprises are often established as nonprofit ventures.
An important contrast to these independent ventures is the corporate new venture. It emerges within larger existing enterprises and is granted autonomy so it can fulfill its promise. Corporate new ventures are an important part of the entrepreneurial world and account for many new innovations. Often constrained by existing commitments and capabilities, corporations can fail to respond to significant new opportunities. Well-planned corporate ventures, however, help refresh and strengthen large corporations.