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It's all about Timing: Age–Dependent Consequences of Founder Exits and New Member Additions

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  • Christina Guenther
  • Simon Oertel
  • Peter Walgenbach

Abstract

This article explores the effects of changes in the initial venture team on a firm's failure risk by considering firm age. The results show that founder exits are especially critical for firm survival in the first years of a firm's existence, whereas the entry of a new team member is more beneficial in later years. Further, an investigation of multiple founder exits shows that the time that elapses between two exits has a U–shaped relationship with a firm's hazard risk. Discussing these findings in terms of imprinting and the liability of newness, we contribute to a more comprehensive understanding of venture team dynamics and firm survival.

Suggested Citation

  • Christina Guenther & Simon Oertel & Peter Walgenbach, 2016. "It's all about Timing: Age–Dependent Consequences of Founder Exits and New Member Additions," Entrepreneurship Theory and Practice, , vol. 40(4), pages 843-865, July.
    • Handle: RePEc:sae:entthe:v:40:y:2016:i:4:p:843-865
    DOI: 10.1111/etap.12148
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    Cited by:

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    2. Holger Patzelt & Rebecca Preller & Nicola Breugst, 2021. "Understanding the Life Cycles of Entrepreneurial Teams and Their Ventures: An Agenda for Future Research," Entrepreneurship Theory and Practice, , vol. 45(5), pages 1119-1153, September.
    3. M. Nesij Huvaj, 2020. "A Co-opetition View of the Entrepreneur–Investor Relationship: Modelling Entrepreneurial Exit Pathways," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 29(2), pages 365-394, September.
    4. Patel, Pankaj C. & João Guedes, Maria & Pagano, Michael S. & Olson, Gerard T., 2020. "Industry profitability matters: The value of sustainable growth rate and distance from bankruptcy as enablers of venture survival," Journal of Business Research, Elsevier, vol. 114(C), pages 80-92.
    5. Jensen, Are & Clausen, Tommy H., 2017. "Origins and emergence of exploration and exploitation capabilities in new technology-based firms," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 163-175.
    6. Åberg, Carl & Bankewitz, Max & Knockaert, Mirjam, 2019. "Service tasks of board of directors: A literature review and research agenda in an era of new governance practices," European Management Journal, Elsevier, vol. 37(5), pages 648-663.
    7. Michael A. Abebe & Pingshu Li & Keshab Acharya & Joshua J. Daspit, 2020. "The founder chief executive officer: A review of current insights and directions for future research," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 406-436, November.
    8. Boone, Sarah & Andries, Petra & Clarysse, Bart, 2020. "Does team entrepreneurial passion matter for relationship conflict and team performance? On the importance of fit between passion focus and venture development stage," Journal of Business Venturing, Elsevier, vol. 35(5).

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