Venture Teams Research Articles

Better Safe Than Sorry –The Role of Team Design in New Venture Teams’ Escalation of Commitment

Better Safe Than Sorry –The Role of Team Design in New Venture Teams’ Escalation of Commitment

Impact of Hierarchical Cultural Values on Idea Generation and Execution of New Venture Teams

Impact of Hierarchical Cultural Values on Idea Generation and Execution of New Venture Teams

How Significant Events and Team Trust Predict Member’s Exit in New Venture Teams

How Significant Events and Team Trust Predict Member’s Exit in New Venture Teams

How Much Difference Makes a Difference - The Effects of Faultlines in New Venture Teams

How Much Difference Makes a Difference - The Effects of Faultlines in New Venture Teams

Exploring New Venture Team Creation and Evolution Through Configurations of Trust

Exploring New Venture Team Creation and Evolution Through Configurations of Trust

The role of passion diversity, compassion, and self-compassion for team entrepreneurial passion

Passion among entrepreneurial teams can contribute to team performance; yet we still have little understanding of the determinants of team passion. Drawing from the literature on social emotions, we theorize and empirically examine the influence of compassion and self-compassion of team members on the shared team entrepreneurial passion (TEP). Using an original sample of 326 individuals from 107 venture teams, we provide novel evidence that, in addition to team passion diversity, compassion and self-compassion significantly relate to TEP. Specifically, we demonstrate that compassion and self-compassion contribute to polyfocal TEP, which is more beneficial for team outcomes than monofocal TEP.

Venture team membership dynamics and new venture innovation

AbstractResearch SummaryAlthough pre‐entry startup experience is widely recognized as a driver of innovation in new ventures, a core feature of new venture teams is that their membership is fluid. In this article, we theorize and test whether venture team membership fluidity incrementally explains new venture innovation. We also investigate and demonstrate that team fluidity conditions the impact of pre‐entry startup experience present at founding. Testing our hypotheses with a cohort of 440 new ventures tracked for 8 years, we find support for the model across a wide range of specifications. Our study advances current understanding of the relationship between pre‐entry experience and new venture innovation, as well as novel insights into the central but often overlooked role of team fluidity.Managerial SummaryNew ventures rely on innovations to establish a market presence and compete against established firms. Even though team members are an essential source of inspiration, ideas, and resources to foster innovation, teams often change substantially as the venture evolves. We ask the question—does modifying the make‐up of the team make it more likely that the venture can innovate? We contend that such change significantly shapes the cognitive and interpersonal processes by which team members contribute to innovations. Our results suggest that new ventures undergoing member change can boost innovation in three ways: adding new members to the team with relevant experiences, taking advantage of opportunities to pause and reflect upon team processes in the wake of change, and mitigating the disruptive effects of change.

Founder-CEOS’ procedural fairness: How and when it matters to new venture ambidexterity

Different from the typical research about procedural fairness that focuses on lower level leaders and its influence on non-managerial teams, we pay particular attention to founder-CEOs’ procedural fairness. To investigate whether and how founder-CEOs’ procedural fairness could help to promote new ventures’ competitiveness, we first link this leadership quality to new ventures’ ambidexterity and propose new venture team members’ advice-seeking behavior as a mediator. We next predict that this indirect benefit is moderated by environmental dynamism, since the association between founder-CEOs’ procedural fairness and new venture teams’ advice-seeking behavior can be lessened when environmental dynamism is not high. Results based on a multi-sourced and time-lagged survey of founder-CEOs and all new venture team members in 92 Chinese new ventures support our predictions. We discuss the theoretical and practical implications.

Task Re-allocation in New Venture Teams: A Team Conflict Perspective

This study contributes a novel perspective on how new venture teams navigate task re-allocation during the new venture development phase. It highlights the relevance of task re-allocation conflict, shows how “negative affect expectations” shape the unfolding of such conflicts, and demonstrates why acting out conflict and its associated negative affect can enable team members to make substantial task re-allocations instead of symbolic ones. The analysis has implications for two bodies of research, which have previously not been considered in tandem: (1) research on task (re-)allocation, professionalization, and structural imprinting in new ventures, and (2) research on team conflict.

Emotions in New Venture Teams: Affects as Signals, Emotional Diversity, and Valuation Effects in Initial Coin Offerings (ICOs)

Emotions in New Venture Teams: Affects as Signals, Emotional Diversity, and Valuation Effects in Initial Coin Offerings (ICOs)

Gender effects of project assessment: Evidence from a market simulation

We investigate how males and females perform as entrepreneurs and traders using information on the trading activities of students participating in a business game in two university courses. In one course, students create entrepreneurial ventures that they pitch to their peers. These students are issued securities of all the ventures and trade in a simulated market based on information revealed in the classroom pitches. In the second course, students trade these ventures in a separate simulated market but do not see pitches and trade based on anonymized written information about the ventures. We measure student performance as entrepreneurs by the traded prices of their proposed ventures in the online market and performance as traders by the value of their closing portfolios. In the course where traders observe the sales pitches of the entrepreneurial teams, we find that both male and female traders buy and sell at lower prices when the female share of the venture team increases. Females buy at higher prices and sell at lower prices than males and end up with lower portfolio values than males. None of these results obtain in the course where trading is based on the same information delivered in written and anonymized form and the gender composition of the venture teams is not known. These findings provide insight on how the assessment and performance of tomorrow's business leaders is affected by environments involving direct sales pitches.

Unequal implies success? How initial ownership split impacts team entry and new venture performance

When launching a new venture, the new venture team (NVT) determines the ownership split, a decision which has implications for the venture's performance. We develop a novel theoretical framework by extending the relational-models theory to the type of ownership split chosen and explaining the choice of an equal or unequal split with the preferred model of social interaction. The models differ in terms of contribution organization and valuation, as well as the primary motivations of NVT members. We hypothesize that NVTs with unequal splits perform better and are more open to NVT entry. Furthermore, NVT entry is hypothesized to act as a partial mediator in the ownership split–performance relationship. We find support for our hypotheses using mediation analysis on a large sample of 24,194 German start-ups. Our research contributes to a better understanding of the performance implications of NVT's internal organization. Our findings, however, do not imply that all NVTs should choose an unequal split. Importantly, our research demonstrates that, depending on owners' preferences, both equal and unequal splits are distinct and viable models for organizing NVTs, even though performance differences should be taken into consideration.

CEOs' leadership behaviors and new venture team stability: The effects of knowledge hiding and team collectivism.

The reasons for new venture team instability gradually have become a vital issue in the entrepreneurship literature. While chief executive officers' (CEOs) leadership behaviors is regarded as a critical element of governance within new venture teams, few studies explored the role played by CEOs' leadership behaviors in new venture team stability. Drawing on the transactional-transformational leadership model, this study divides CEOs' leadership behaviors in new ventures into two categories, namely, transformational and transactional leadership behaviors. Based on the social exchange theory and the social information processing theory, this study constructs a moderating mediation model to understand how transformational and transactional leadership affects new venture team stability. In this model, knowledge hiding is used as mediating role and team collectivism is used as moderating role. Three-wave and two-source data was collected from 66 new ventures in China and an ordinary least squares hierarchical regression model and Hayes' moderated-mediation approach were applied to test the hypotheses.Findings-The results show transformational leadership and transactional leadership are positively related to new venture team stability. Knowledge hiding mediates the association between transformational leadership and new venture team stability and that between transactional leadership and new venture team stability. Moreover, a high level of team collectivism corresponds to a stronger relationship between transformational leadership and knowledge hiding and a greater indirect effect of transformational leadership on new venture team stability through knowledge hiding. This study explores the mechanisms and boundary conditions of the effect of transformational leadership, transactional leadership, and new venture team stability, which is an enrichment to the study of governance within new venture teams. It enlightens managers to take effective measures to reduce knowledge hiding and maintain team stability in new venture teams.

Explore or exploit? Unpacking the situational conditions and cognitive mechanisms underlying entrepreneurial learning in the new venture development process

ABSTRACT This study explores when and why entrepreneurs choose entrepreneurial learning strategies that emphasize exploration or exploitation. Most studies have focused on explaining the different characteristics of exploration and exploitation, their performance implications, whether they are complementarities or substitutes and how particular organizational structures can support their coexistence. We apply a process design building on four research-based spinoffs observing how changes in entrepreneurs’ choices of exploration and exploitation occur as they identify and adopt a viable configuration for their ventures. In this study, we develop a theoretical model that reveals the situational conditions and mechanisms underlying entrepreneurs’ learning choices and highlights different knowledge typologies and competence gaps that new venture teams need to fill when dealing with uncertainties and performance errors.

Integrating the external enablers of new venture creation theory into practice: A simulation approach for teaching entrepreneurship

Theory and practice in entrepreneurship education are still a subject of research. This paper proposes a simulation in which, based on the External Enablers of New Venture Creation approach, students can translate environmental changes generated by the unbalancing conditions of the Covid-19 pandemic into strategic entrepreneurial actions. The practice-based approach grounded in actionable theory is chosen to build our simulation. The exercise is carried out through the business model canvas because of its practical value. Running the simulation proves to be helpful in teaching new theoretical approaches. The simulation also proves that new venture teams can impact more the conversion of environmental changes into strategic entrepreneurial actions than individual entrepreneurs.

Management of Innovation in Organizations and the Innovation Imperative

Companies require understanding the innovation imperative and the importance of managing innovation in organizations. The objective of the study is to analyze the importance of innovation and managing innovation in organizations. The methodology adopted is a conceptual analysis of the various aspects of the innovation imperative and managing innovation in organizations. The innovation imperative may focus on incremental innovation, new-to-the-world innovation, and new product launches and failures. Companies adopt approaches towards managing innovation viz. departments in charge of current offerings, new product departments, innovation centres, venture teams, communities of practice, and cross-functional teams. Innovative companies adopt initiatives for managing innovation. Academicians may suggest better and effective models for managing innovation in organizations. Practicing managers may realize the importance of innovation in company growth, evaluate the approaches and initiatives adopted by companies towards managing innovation, and suggest effective approaches and initiatives.

Citizenship behavior and new venture survival: a cultural tightness-looseness capabilities lens

PurposeThe authors advance a model theorizing how new ventures elicit citizenship behaviors to cultivate dynamic capabilities that help bolster survival in their nascent years of operations—a characteristically resource-scarce and turbulent context.Design/methodology/approachDrawing on and integrating research on citizenship behaviors with dynamic capabilities, the authors develop a theory that new ventures that are better able to evoke a combination of affiliative and challenging citizenship behaviors from their wider entrepreneurial team (i.e. internal, and external stakeholders) are more adept at mitigating the liabilities of smallness and newness. As these behaviors are spontaneous and not explicitly remunerated, new ventures become stronger at utilizing their limited resource base for remaining lean and agile. Further, key boundary conditions are theorized that the sociocultural norms the venture is embedded within serve to heighten/attenuate the degree to which entrepreneurs can effectively cultivate dynamic capabilities from their team's “extra mile” behaviors.FindingsThe propositions extend a rich body of research on citizenship behaviors into the new venture domain. As all new ventures face the challenge of overcoming liabilities of newness, models that help understand why some are more adept at overcoming this and why others fail, hold substantive practical utility.Originality/valueThis research is the first to unpack how citizenship behaviors manifest among an extended range of stakeholders traditionally overlooked in new venture teams research and the mechanism for how this links to venture survival.

New venture teams and acquisition: Team composition matters

ABSTRACT This study examines the relationship between new venture team characteristics on the acquisition likelihood of the new venture. We find that for a US sample of new ventures: new venture teams with equal numbers of females and males, as well as those with higher average education levels are more likely to be acquired. In addition, our results show that higher diversity in industry experience may decrease the acquisition likelihood of new ventures. This implies that teams consisting of both extremes, highly industry experienced and non-experienced members, tend to have the lowest acquisition likelihood all else being equal. This study adds to the rare empirical evidence regarding the factors associated with the exit of new ventures founded by teams, by providing evidence on the effect of team diversity and human capital level on acquisition likelihood. The results may be of interest to both entrepreneurs and external investors.

Emotions in New Venture teams (NVTs): The Valuation Effects of NVTs‘ Affects in Crowdfunded Projects

This study relates New Venture Teams’ (NVTs’) emotional displays to firm valuations in blockchain-based crowdfunding (i.e., Initial Coin Offerings, ICOs). Tracking 2,520 NVT members in 165 ventures over the course of their crowdfunding campaigns, I exploit the neurological link between the central nervous system and facial muscle contraction-relaxation patterns to identify NVT members’ affective traits from their facial expressions. The results suggest that the level of NVTs’ negative affects is associated with lower ICO firm valuations, while within-NVT “emotional diversity” has a value-increasing effect. Intuitively, negative affects are associated with traits, such as relative risk intolerance and analytical perfectionism, which may be prejudicial in dynamic entrepreneurial markets, but could be valuable if balanced by opposite traits in emotionally diverse NVTs. The results for positive affects are diametrically opposed, albeit non-significant. Overall, this study extends the focus of the affective entrepreneurship literature to the NVT level, introduces the concept of emotional diversity, and explores the role of emotions in entrepreneurial finance.

Identity Fusion and New Venture Performance: Team Average and Dispersion Effects

The present paper studies the relationship between entrepreneurial identity on new venture performance through a group level analysis. It expands on the concept of identity with a metric of identity fusion for the new venture team context and uses a longitudinal field design with repeated survey responses of multiple members in knowledge-intensive new venture teams from Sweden, Denmark, and Russia. Results from multilevel structural equation modeling (MSEM) showed that while there was significant dispersion in intensity of identity fusion among members within a new venture team, there was no direct effect between average team identity fusion and venture performance, as represented by external funding, customer acquisition status and product advancement status. The results run contrary to recent findings of a positive effect between identity fusion and firm performance and makes the case for further explorations into the consistency of the relationship between identity fusion and venture outcomes. The study is among the first to consider venture outcomes of group-level identity in entrepreneurship, highlighting the salience of identity fusion as one of several potential forms of group identity.