Founder exits and firm performance: An exploratory study (original) (raw)
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Gaining understanding in entrepreneurial team formation during the venture creation process is particularly relevant for investors as well as technology transfer officers. Research has shown that venture capitalists state that the quality of the founding team is one of the most important criteria when they decide to invest in a start-up. Although relatively limited, an emerging body of entrepreneurship and organizational literature has started focusing on team-level issues and only recently, attention has shifted from the lone entrepreneur/founder to the whole entrepreneurial team. This stream of research mainly examined team process and effectiveness. While scholars suggest that diversity is an important topic in both academic research and practice and team heterogeneity has important influence on firm performance, however, research on demographic diversity in entrepreneurial teams is still limited. The present paper focuses on characteristics of founding team groups in pre-start up phase, and on the changes that occurs in terms of founders group's structure in the process of constitution. We asses that predictors of success of an entrepreneurial founders group, measured in terms of turning the business idea in a real company, are group' size, higher levels of education, differentiation in competencies, work experience and heterogeneity of backgrounds of the founders. Moreover we discuss on absorptive capacity and dynamic capabilities (Nelson & Winter, 1982, Cohen & Bacdayan, 1994; Zahra & Georges, 2002; Winter, 2003) stating that changing in the groups' structure in terms of entry and leaving of different members improves the capability of entrepreneurial group and then the chances of constitution of a new company. Our paper contribute to the literature on innovation business venture formation mainly in two way: first in terms of the robustness of results, due to the consistency of the data-set we analyzed in terms of amount of different data and their longitudinal nature. Second because, since we are interested in team formation and development, it is important to get information from the original founding team and from relevant stakeholders in the parent organization and environment and we used different kind of sources to collect data directly from founders even post facto. These conclusions have major implications on how innovative start-ups are evaluated by investors and in terms of policy that support ventures creation. Important managerial implications arise from our findings.