Entrepreneurial Team Assembly

This chapter provides a review of the scholarly literature on entrepreneurial teams and team formation. It pays special attention to two emerging areas of research that present many promising opportunities for future work. First, the chapter discusses the role of resource transfer in the context of start-up firms. It argues that an understanding of the antecedents and consequences of the founding process would be significantly advanced by more explicit theorizing and effort to empirically identify the specific types of resources entrepreneurial team members bring to start-up firms. It highlights one recent advancement in this space—work that has focused on a team’s ability to transfer customer and client relationships from the parent to start-up firms—and provides an outline of open research questions in this realm. Second, the chapter provides a primer on a recent methodological advancement—the use of two-sided assortative matching models—that can be applied to entrepreneurial team assembly to alleviate ongoing concerns that team formation is fundamentally an endogenous process. It demonstrates how these models can be applied using a wide variety of founder, cofounder, and early team member attributes, including an individual’s ability to transfer customer relationships. Importantly, it proposes that synergies emerging from the use of two-sided assortative matching models to study a broader set of team member attributes that include resource transfer will open promising new avenues for future research.

Institutions and the Embedded Entrepreneur

This chapter examines the relationship between entrepreneurs and the communities in which they are embedded. It argues that the actions of entrepreneurs and their firms are contextually situated in specific geographies that make their actions endogenous in the development of place and define a place-specific institutional logic. This argument is at odds with the view that industry clustering is due to the role of incumbent firms. This chapter reconciles these views by adopting a temporal view, allowing both incumbents and geography to co-occur and influence clustering. It then considers the current evidence of entrepreneurs’ effects on regional resources and capacity, and concludes with suggestions for future research.

Collaboration Among Silicon Valley Venture Capitalists

Regional differences among industry clusters have long been a puzzle, especially when performance differences are significant. This chapter examines the case of venture capital investing, in which Silicon Valley differs from the rest of the world despite attempts to imitate its model. The point of entry in this chapter is the contract between venture capitalist and entrepreneur. Although such contracts have been analyzed in other research, this chapter argues that the psychological effects of different contract styles are of primary importance to innovative outcomes of entrepreneurial ventures. Thus, it argues that regulatory focus theory, which considers the psychological effects of contracting, is essential to understanding differences in practice and outcomes in venture capital clusters.

The Contingent Effect of Team Composition on the Performance of Entrepreneurial Teams

Despite the continuous interest in studying entrepreneurial teams, the relationship between team composition and, particularly, team diversity and performance remains fertile ground for active debate. Taking roots in the knowledge-based view and organizational learning literatures, this chapter argues that performance in entrepreneurial teams is contingent on (a) the overlap between team members’ knowledge/competences and the content of the performed tasks, (b) the duplication of the team members’ knowledge in the areas with that content, (c) the nature of tasks (exploration or exploitation), (d) the team’s flexibility to adapt to changes in the content and nature of those tasks, and (e) the rate of environmental change. Because an important source of ambiguity in the understanding of how team diversity and performance are linked ties to issues of how team diversity is conceptualized and operationalized, the chapter also proposes a new way of looking at diversity in future research.

The Crowdfunding Paradigm

Crowdfunding has become a major consideration for individuals looking to fund their ideas, endeavors, and businesses. This phenomenon raises interesting questions for management scholars, such as what theories help to explain the nuance of crowdfunding as a form of entrepreneurial financing. With regard to what leads to crowdfunding campaign success, this chapter argues that there are mixed motives associated with contributing to these campaigns, and theoretical dynamics vary according to these different motives. The chapter also notes two fundamental differences of crowdfunding from more traditional means of funding early-stage ventures: the nature of engagement and preference toward product or person. Drawing on theory related to capabilities, the chapter identifies conditions under which crowdfunding is likely to be more and less advantageous based on these two dimensions. In summary, it provides a model that explains important sources of heterogeneity (i.e., motives) and homogeneity (i.e., diffused engagement and product lock-in) within the crowdfunding phenomenon that add nuance to theory in the entrepreneurial financing literature.

Collaborating for Innovation

This chapter looks inside the firm at how organizational design affects collaboration in pursuit of corporate entrepreneurship or “intrapreneurship.” It shows how the intrafirm “marketplace” of ideas, employees, and resources can be strategically configured to encourage or inhibit collaborative innovation. The chapter focuses on the key structural dimensions of autonomy, sponsorship, and incentives. Complementarities between these dimensions create spillover effects that produce unique innovation outcomes by mitigating barriers to collaboration such as knowledge problems, resource constraints, and employee motivation. Illustrating configurations of these dimensions with company examples, the chapter shows how organizational design affects intrapreneurship and offers suggestions on how firms might strategically align their organizational structure with their intrapreneurial strategy.

Family Founding Teams, Internal and External Collaboration, and New Venture Growth

Despite the prevalence of spousal, sibling, and parent–child ties within venture founding teams, little research has examined how family relationships among founders influence early entrepreneurial processes. This chapter explores how family relationships within founding teams influence internal and external collaboration. Within the firm, the chapter focuses on collaboration issues related to recruitment, changes in the management team, and strategic decision making. Beyond the firm’s boundaries, the chapter focuses on collaboration with external investors, strategic partners, potential acquirers, and post–initial public offering stakeholders. It draws upon the literatures on family businesses and high-growth new ventures to explore how family ties may influence collaboration processes over three broad stages of venture development: seed, commercialization, and growth and exit. The chapter concludes by highlighting unanswered research questions and by identifying relevant methodologies, settings, and data sources with which to address these gaps.

Dynamic Networking by Entrepreneurs

Entrepreneurs are active networkers; network connections change over time, new contacts are added, and others are dropped. Entrepreneurial networking is an integral part of entrepreneurial processes and can be a strategic and goal-oriented response to resource requirements; it can also be effectual and driven by an individual and collective desire to meet and interact. This chapter examines how entrepreneurs change their network and use a variety of actions and strategies to engage with friends, family, partners, and strangers. Although entrepreneurial networking in part is driven by critical events and crises as triggers, individual differences in motivation and ability also affect the way entrepreneurs respond and use networking in an uncertain and challenging environment.

The Interplay of Entrepreneurship and Collaboration

The role of collaboration in entrepreneurship spans across different contexts, varied theoretical perspectives, and multiple units of analysis. This chapter introduces The Oxford Handbook of Entrepreneurship and Collaboration with an overview of the important role that collaboration plays in value creation, resource acquisition, and the development of entrepreneurial ventures. It is organized in two ways. First, the chapter summarizes each chapter to direct readers to the material of greatest relevance and interest to them. Second, it identifies important research questions to further push connections between the fields of entrepreneurship and interorganizational collaboration.

Collaboration Inside the Firm

Founding and operating a firm is a collaborative process, but still little is known about the nature of collaboration between entrepreneurs and other members of the new-venture team, particularly key employees. For example, traditional entrepreneurship literature believed that founders always run their start-ups personally, at least in the early years of operation. However, recent empirical studies suggest that a significant share of founders hire CEOs for their start-ups at the time of founding or soon thereafter. This chapter explores what motivates founders to delegate managerial control to a hired agent, how founders choose their managers, and how they govern relationships with their CEOs.