Clashes Among Founding Partners: How Entrepreneurs Overcome Conflicts?

Abstract

Objective: Conflicts have negative impacts on organizational performance and can lead to company mortality. The GVentures Accelerator, from the School of Business Administration of São Paulo (EAESP-FGV) identified that several startups that failed during and after the acceleration process had conflicts among the founding partners. This work aims to understand why some entrepreneurial teams in a pre-seed stage are able to overcome conflicts while others are not Methodology: We conducted a case study of 9 accelerated startups using in-depth interviews with 20 founding partners, and the interviews were followed by the codification and analysis of the cases with support from the manager responsible for the accelerator.Results: The research concludes that operational conflicts that escalate to affective conflicts due to disagreements in the process of giving and receiving feedback and/or mistrust between partners can lead to the dissolution of a company. On the other hand, founding members, even if they experience affective conflicts, are able to overcome the problems using the strategies of taking a step aside, giving in and putting their egos aside. It was also identified that the acceleration process tends to exacerbate the operational conflicts between founding partners.Theoretical/methodological contributions: The research contributes to the literature about founding teams by pointing out that operational conflict does not necessarily lead to the dissolution of the organization or closing the business, but operational conflicts that intensify to affective conflicts due to disagreements in the process of giving and receiving feedback and/or distrust among partners can lead to the dissolution of the organizationRelevance/originality: Founding teams are the backbone of any company. In spite of several articles discussing team conflict little is known about why some entrepreneurial team are able to overcome conflicts while other not. Moreover, also little is known about the role accelerators play in these conflicts.Social/management contribution: The conclusions about the strategies for managing founding team conflicts: taking a step aside, giving in and putting their egos aside; may be very useful for both entrepreneurs and accelerators’ management team in dealing with conflicts among founders.