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How should we divide the pie? Equity distribution and its impact on entrepreneurial teams

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  • Breugst, Nicola
  • Patzelt, Holger
  • Rathgeber, Philipp

Abstract

Drawing on a multiple case study approach and data on eight entrepreneurial teams observed over six months this article develops a dynamic model of the consequences of equity distribution among team members. Perceived justice of equity distribution emerged as a key variable influencing entrepreneurial team interactions and important entrepreneurial outcomes. High perceived justice triggered positive team interaction spirals, whereas low perceived justice triggered negative interaction spirals. Teams exposed to external threats drifted from a positive spiral to a negative spiral despite high perceived justice. We discuss the implications of our study for research on entrepreneurial imprints, justice, and exit.

Suggested Citation

  • Breugst, Nicola & Patzelt, Holger & Rathgeber, Philipp, 2015. "How should we divide the pie? Equity distribution and its impact on entrepreneurial teams," Journal of Business Venturing, Elsevier, vol. 30(1), pages 66-94.
  • Handle: RePEc:eee:jbvent:v:30:y:2015:i:1:p:66-94
    DOI: 10.1016/j.jbusvent.2014.07.006
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jbvent:v:33:y:2018:i:3:p:261-277 is not listed on IDEAS
    2. Mathias, Blake D. & Williams, David W. & Smith, Adam R., 2015. "Entrepreneurial inception: The role of imprinting in entrepreneurial action," Journal of Business Venturing, Elsevier, vol. 30(1), pages 11-28.
    3. Pérez-Centeno, Victor, 2018. "Brain-driven entrepreneurship research: Expanded review and research agenda towards entrepreneurial enhancement," Working Papers 02/18, Institut für Mittelstandsforschung (IfM) Bonn.
    4. Suddaby, Roy & Bruton, Garry D. & Si, Steven X., 2015. "Entrepreneurship through a qualitative lens: Insights on the construction and/or discovery of entrepreneurial opportunity," Journal of Business Venturing, Elsevier, vol. 30(1), pages 1-10.
    5. Pérez-Centeno, Víctor, 2017. ""It takes three to tango": Brain, cognition and entrepreneurial enhancement," Working Papers 02/17, Institut für Mittelstandsforschung (IfM) Bonn.

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