Abstract
While the dissolution of new ventures is a common phenomenon in the organizational landscape, it seldom means the end of the road for those involved in the new venture. Nevertheless, most research treats this dissolution with a sense of finality. Using the Danish Integrated Database for Labor Market Research (IDA), we explore the persistence of cofounders and early employees to continue their work relationships after the dissolution of the new venture. We investigate where these team members continue their career and whether they pursue entrepreneurship together in another new venture. Overall, over 18.3% move jointly, and comobility is more prevalent among new venture team members who worked jointly prior to founding the new venture and among those new venture teams demonstrating high levels of homogeneity. Moreover, comovers tend toward small firms, and comobility occurs largely in similar industry. A large share of comovers move to new ventures, which is indicative of serial or habitual new venture teams. This also raises further question on team-level dimension of learning from failure.
Highlights
Plain English Summary There is lots of empirical research that investigates the emergence and growth of team-based new ventures
The results demonstrate that similarity between new venture team (NVT) members, the extent that they are engaged in knowledge intensive work, and prior joint work experience are drivers of such comobility
Because we are interested in understanding the determinants of comobility, we focus on the relationship that exists between NVT members and, on the relationship between individual pairs or dyads
Summary
Plain English Summary There is lots of empirical research that investigates the emergence and growth of team-based new ventures. Jenkins and McKelvie (2017) noted that this research treats such events with a sense of finality and expressed the need to understand what happens to entrepreneurs and their resources in the aftermath of a dissolution In doing so, they demonstrated that most entrepreneurs remain active in the labor market. Since a sizeable share of new ventures are founded and run by teams (Coad & Timmermans, 2014; Klotz et al, 2014), understanding what happens with teams following the closure of their business provides us with valuable insights into the mechanism, dynamics, and implications related to entrepreneurship and failure. Timmermans when the new venture closes this does not mean that all aspects of the new venture failed (Coad, 2014)
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