Avoiding the Familiarity Trap: How entrepreneurs reach beyond their network to attract co-founders

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Entrepreneurs assemble teams almost exclusively composed of people they already know, even though there are potential benefits of adding someone from beyond their personal network. Despite the proliferation of new programs and platforms aimed at giving entrepreneurs access to vastly broader pools of potential team members, entrepreneurs likely struggle to attract unfamiliar others to the venture. By integrating similarity attraction theory with research on surface-level and deep-level diversity, we explain how entrepreneurs can better attract unfamiliar others to their venture if they share deep-level similarity (e.g., personality, goals), rather than surface-level similarity (e.g., ethnicity, gender). We test our theory using survey and archival data from a sample of entrepreneurs and potential team members enrolled in an incubator program designed to help entrepreneurs form a team and launch their venture. Our model and results show that entrepreneurs can attract unfamiliar others to their venture when they are similar on less-visible dimensions and that adding a team member from beyond the entrepreneur’s network promotes early venture success.