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New ventures almost by definition possess fewer resources than do established firms. Even in well‐funded entrepreneurial companies, many resources associated with the organizational infrastructure, such as organizational practices, policies, and routines, are not in place. Yet academic research emphasizes a firm's resources for their ability to generate economic rents. Does this imply that an entrepreneurial firm must necessarily be at a performance disadvantage vis‐à‐vis established firms? And is this performance disadvantage likely to be sustained in the long run if the entrepreneurial firm remains in the undesirable position of continually playing resource “catch‐up” to established firms? How can we explain entrepreneurial firms that surpass large firms endowed with substantial resources?