Anticipating that innovation nurtures entrepreneurship, we began an extended case study of an innovative start-up in the space industry. We quickly saw that institutions imposed formidable barriers to implementing entrepreneurship from innovation. Curious about how, why and the extent of this situation, we widened our study to other start-ups, CEOs of existing businesses, an incubator, a technology transfer office and key influencers in large space companies and agencies. We found that institutions and policies had, in effect, shrunk the entrepreneurial field, leaving little room for enterprise. Conceptualizing from this, we propose the institutions create an “entrepreneurial space.” Theoretically, we explain how this concept of an entrepreneurial space can be usefully applied in other contexts.