As a minority and marginalized group long overlooked in mainstream entrepreneurship research, underdog entrepreneurs face distinctive and often difficult-to-change structural challenges in their entrepreneurial journey, that arise from their persistent disadvantaged positions. Investigating the entrepreneurial underdog status is not only crucial for providing targeted support to this group but also offers new theoretical perspectives for advancing inclusive and context-sensitive entrepreneurship research. Despite growing academic interest, the conceptualization and measurement of entrepreneurial underdog status remain underdeveloped, with most existing studies relying on fragmented theoretical discussions or secondary data proxies. To address this gap, this study adopts a mixed-methods approach, combining qualitative inquiry based on grounded theory with quantitative validation across three rounds of surveys, to systematically explore the content, structure, and predictive validity of entrepreneurial underdog status.

Drawing on semi-structured in-depth interviews with 27 representative underdog entrepreneurs from diverse backgrounds across China, including individuals with disabilities, migrant workers, female entrepreneurs, and veterans, the study identifies four core categories of challenges that collectively define entrepreneurial underdog status: resource endowment deficits, physiological constraints, cognitive limitations, and external environmental barriers. Through open, axial, and selective coding procedures, these dimensions are further refined into a coherent theoretical framework. An initial 22-item scale was developed and subsequently administered to two independent samples (N?=191; N?=425). Exploratory and confirmatory factor analyses yield a robust four-factor, 14-item scale with satisfactory internal consistency, convergent validity, and discriminant validity. The four dimensions are respectively conforming to the classical theoretical perspectives, such as resource-based view, human capital theory, social cognition theory, and institutional theory, thereby ensuring the conceptual grounding of the measurement tool.

To further evaluate criterion-related validity, the study draws on self-regulation theory and examines the nonlinear relationship between entrepreneurial underdog status and entrepreneurial exit intention using two-wave data from 317 entrepreneurs. Results reveal a significant U-shaped relationship: at low levels of underdog status, individuals tend to adopt approach-oriented self-regulation strategies, such as persistence and resilience, which reduce exit intentions; at high levels, however, defensive mechanisms dominate, leading to increased withdrawal intentions. This curvilinear pattern remains robust after controlling for demographic characteristics, firm characteristics, and fear of failure. Further dimensional analyses show that the U-shaped effect is primarily driven by resource endowment and cognitive challenges, whereas physiological constraints and external environmental barriers exhibit linear positive effects on exit intentions, reflecting their distinct proximal versus distal roles in the entrepreneurial process.

Taken together, this study makes three key contributions. First, it clarifies the multidimensional structure of entrepreneurial underdog status, providing a systematic analytical framework for future theoretical development. Second, it develops and validates a reliable measurement scale, thereby enabling empirical research to move beyond conceptual discussions. Third, it uncovers a nuanced U-shaped mechanism linking entrepreneurial underdog status to exit intentions, challenging conventional linear assumptions and extending the application of self-regulation theory in entrepreneurship research. Practically, the findings offer actionable insights for underdog entrepreneurs to reframe their disadvantages and for policymakers to design targeted, inclusive support systems. The study also acknowledges limitations regarding self-reported data, cultural specificity, and cross-sectional design, while outlining promising directions for future research, including dynamic, cross-cultural, and longitudinal investigations.