Building Trust in Entrepreneurial Teams: The Role of Team Narratives

Abstract

Although trust between co-founders is critical for the success of an entrepreneurial team, we have limited insights into what builds a founder’s trust in the team. Taking a social information processing perspective, we develop theory on the role of entrepreneurial team narratives in building a founder’s cognition-based trust in his or her entrepreneurial team. We focus on two structural dimensions of entrepreneurial team narratives, heterogeneity of narrative topics in a team and uniqueness of narrative topics in a team, hypothesizing that these are positively related to a founder’s cognition-based trust in his or her entrepreneurial team. We theorize these relationships to be context-dependent, such that a founder’s perceived resource scarcity will negatively moderate the relationships between the structural dimensions of team narratives and a founder’s cognition-based trust in the team. We draw on interview and questionnaire data from 102 founders across 43 complete entrepreneurial teams to provide evidence in support of our hypotheses. Not only does our study have implications for research on building trust in entrepreneurial teams, entrepreneurial narratives, and resource scarcity, but it also has methodological implications by illustrating how automated topic modeling techniques can be used to study narratives and other texts in entrepreneurship research.