Abstract
This study examines the interaction effects of entrepreneurial team experiences and resources on new-born startup firm performance, from a contextual view point of entrepreneurship. The sample is from a longitudinal panel data of Kauffman Firm Survey conducted over the period of 2005-2012 by the Ewing Marion Kauffman Foundation. Results suggest that financial resources have positive impacts on startup firms’ profitability; whereas the impacts of initial firm size on profitability are negative. Startups are more likely to be profitable when the firm size is small at the new-born stage. The positive impact of financial resources on profitability is greater when entrepreneurial teams have strong industry experience; whereas entrepreneurial teams’ industry experience and intangible resources have a negative interaction effect on profitability. Entrepreneurial team’s startup experience has most negative interaction effects on new-born startup firms’ profitability. This finding indicates that the entrepreneurial team’s startup experience plays stronger roles in venturing profitable startups when the amount of financial resources and initial firm size are small; however, the team’s startup experience and intangible resources have positive interaction effects on new-born startups’ profitability.
Highlights
Given the fact that most startups are typically launched and grown by teams but not individuals (Klotz, Hmieleski, Bradley, & Busenitz, 2014; Khan, Breitenecker, & Schwarz, 2015), entrepreneurial teams have received broad research attention due to their important roles in acquiring and exploiting critical resources for starting successful businesses (Shrader & Siegel, 2007; Klotz et al, 2014)
Compared with firms founded by solo entrepreneurs, startup firms founded by entrepreneurial teams have advantages in attracting venture capital and completing initial public offerings (Beckman, Burton, & O'Reilly, 2007); achieve better performance in changing industry environments (Robert Baum & Wally, 2003); and are more successful than solo-founder firms (Chandler & Hanks, 1998)
Extant empirical literature has widely documented significant impacts of startup firms’ resources and entrepreneurial team’s experiences on startup performance, few studies tested the interaction effects of resources and team experiences on a sample of new-born startup firms that are at the infant stage
Summary
Given the fact that most startups are typically launched and grown by teams but not individuals (Klotz, Hmieleski, Bradley, & Busenitz, 2014; Khan, Breitenecker, & Schwarz, 2015), entrepreneurial teams have received broad research attention due to their important roles in acquiring and exploiting critical resources for starting successful businesses (Shrader & Siegel, 2007; Klotz et al, 2014). Compared with firms founded by solo entrepreneurs, startup firms founded by entrepreneurial teams have advantages in attracting venture capital and completing initial public offerings (Beckman, Burton, & O'Reilly, 2007); achieve better performance in changing industry environments (Robert Baum & Wally, 2003); and are more successful than solo-founder firms (Chandler & Hanks, 1998). A better understand of contexts in which entrepreneurs collectively identify, discover, create, and implement opportunities would help greater understand entrepreneurial teams. As context itself is multifaceted, the current study responses to the call of Klotz et al (2014) that much remains need to be understood regarding to the influences of entrepreneurial teams on various http://ibr.ccsenet.org. Resources are all assets, capabilities, competencies, organizational processes, firm attributes, information, knowledge, and so forth that are controlled by a firm (Barney, 1991). Tangible resources, and organizational capabilities (Barney, 1991)
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