United or divided? Entrepreneurial passion and faultlines in new venture teams

Abstract

ABSTRACT Research has yielded accumulated insights that new venture team (NVT) compositional diversity is a driving force behind the NVT success. However, studies have largely examined diversity attributes in isolation and tended to focus on demographic diversity as the primary source of identification separation with a static approach. In this study, we adopted the team faultline perspective to examine the alignment effect of NVTs’ multiple diversity attributes on NVT performance. Meanwhile, we identified entrepreneurial passion as an alternative and affective source of identification, and investigated the joint influence of these two distinct sources of identification on NVT performance across four stages of competition. Our findings indicate that NVT faultline strength is negatively related to team performance; High team entrepreneurial passion (TEP) mean mitigates the negative effect, whereas high TEP focus variety exaggerates the same negative effect. Our study has important implications for the literature on NVT diversity and entrepreneurial passion.