<p>This study investigates how small and medium-sized enterprises (SMEs) develop and leverage collaborative learning capabilities to mitigate effects of institutional voids. Drawing on data from 44 entrepreneurs in a developing economy, we identify four phases in developing the collaborative learning capabilities. Phase 1 emphasizes recognizing the nature and scope of institutional constraints and resource deficits. These motivate the entrepreneurial firms to focus on elevating venture performance, exemplified by consistently adhering to high standards (Phase 2). Phase 3 involves cultivating diverse ties to navigate and overcome institutional voids. Phase 4 is characterized by network learning as a mechanism for capability development and for accessing heterogeneous resources and competencies. The broader theoretical and practical implications of these findings are examined.</p>