Entrepreneurial Team Formation Dynamics: Mind the Sector

Abstract

The purpose of this paper is to extend existing research on entrepreneurial team formation under a competence-based perspective by empirically testing the influence of the sectoral context on that dynamics. We use inductive, theory-building design to understand how different sectoral characteristics moderate the influence of entrepreneurial opportunity recognition on subsequent entrepreneurial team formation. A sample of 195 founders who teamed up in the nascent phase of Interned-based and Cleantech sectors is analysed. The results suggest a twofold moderating effect of the sectoral context. First, a technologically more challenging sector (i.e. Cleantech) demands technically more skilled entrepreneurs, but at the same time, it requires still fairly commercially experienced and economically competent individuals. Furthermore, the business context also appears to exert an important influence on team formation dynamics: data reveals that individuals are more prone to team up with co-founders possessing complementary know-how when they are starting a new business venture in Cleantech rather than in the Internet-based sector. Overall, these results stress how the business context cannot be ignored when analysing entrepreneurial team formation dynamics by offering interesting insights on the matter to prospective entrepreneurs and interested policymakers.