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Being embedded in family has proven to bring opportunities and facilitate resources for a firm. However, it has its dark side, where too much family involvement may hamper the entrepreneur’s ability to develop psychological ownership of the firm. By focusing on the role that family plays in entrepreneurship, this paper aims to explore how embeddedness and agency interact during the entrepreneurial process. The research questions are as follows: how does family interact in the entrepreneurial process? How does embeddedness inform this process?

The paper builds on a longitudinal case study of a small firm that is part of a local community of family-controlled firms. The narrative was created through in-depth interviews with the business owner covering a period of eight years from the opening to the closure of the firm. Departing from theories of family embeddedness, the family is viewed as part of the context.

The findings show how agency operates in a community of family-controlled firms and how entrepreneurship is thus partly executed outside the firm’s legal boundaries. The metaphor of a marionette illustrates how family may tie up and restrain an entrepreneur. This hampers the entrepreneur in developing psychological ownership of the firm and thereby restrains the firm’s development. This shows a downside to having too much positive influence from embeddedness.

The paper stresses the social role of family by emphasising the value that a family can bring to an entrepreneurial process and thereby to society at large. Practitioners need to reflect on the effects of embeddedness. By recognising the downsides of too much help from outsiders, they may instead strive for a balance. By introducing the theory of psychological ownership to the literature on embeddedness, this paper opens the space for future developments of this cross-section.

The paper contributes to the entrepreneurship literature by unfolding the mechanisms of family embeddedness and illustrating how embeddedness informs the entrepreneurial process in different ways. Even though over-embeddedness has been investigated before, this has primarily focused on the negative control from outside the firm. This paper uses the notion of psychological ownership to shed light on the previously hidden problem of too much positive influence from family.

The purpose of this paper is to explore the roles of identities in entrepreneurial processes during the development of a new market. Two research questions are used: How do the founder’s identity, corporate identity and market identity interact as a new market is developing, and what are the functions of identity in the entrepreneurial process?

This qualitative research is grounded in a study of multiple cases, from which five Swedish start-ups have been selected. Interviews were conducted with the founders at several points in time and accompanied by observations of websites, media performance, policy documents and commercial material. Analysis was conducted in an iterative process between empirics and theory.

The findings show how identities develop in entrepreneurs, firms and the market and how the interactions between these three levels of identity affect the development of each. The authors recognize and discuss three functions of identity: a constructing function, in which identity is used to create a new firm and market; a guiding function, which navigates between identities by imposing identity work on founders, firms and markets; and a configuring function, which takes part in shaping contexts.

This paper opens a space for future research on identities to advance understandings of how new firms and markets are developed. Investigating identity shows the importance of context to entrepreneurial processes. This points towards a need for researching different contexts, but also to the potential limited value of this study.

The paper offers guidance to founders and managers in understanding and navigating different identities. Founders and managers are provided with a set of critical questions, which aim to assist when managing identity-related concerns.

There is a vast amount of literature on the development of companies and markets, yet start-ups in new markets operate in different contexts and face different challenges that we know less about. This paper targets the latter and proposes identity as a useful lens for understanding the dynamics between entrepreneurs, start-ups and the new market.