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Birds of a feather get lost together: new venture team composition and performance

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  • Paul Steffens

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  • Siri Terjesen
  • Per Davidsson

Abstract

This study explores the relationship between new venture team composition and new venture persistence and performance over time. We examine the team characteristics of a 5-year panel study of 202 new venture teams and new venture performance. Our study makes two contributions. First, we extend earlier research concerning homophily theories of the prevalence of homogeneous teams. Using structural event analysis we demonstrate that team members’ start-up experience is important in this context. Second, we attempt to reconcile conflicting evidence concerning the influence of team homogeneity on performance by considering the element of time. We hypothesize that higher team homogeneity is positively related to short term outcomes, but is less effective in the longer term. Our results confirm a difference over time. We find that more homogeneous teams are less likely to be higher performing in the long term. However, we find no relationship between team homogeneity and short-term performance outcomes. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Paul Steffens & Siri Terjesen & Per Davidsson, 2012. "Birds of a feather get lost together: new venture team composition and performance," Small Business Economics, Springer, vol. 39(3), pages 727-743, October.
  • Handle: RePEc:kap:sbusec:v:39:y:2012:i:3:p:727-743
    DOI: 10.1007/s11187-011-9358-z
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    References listed on IDEAS

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    1. Ensley, Michael D. & Pearson, Allison W. & Amason, Allen C., 2002. "Understanding the dynamics of new venture top management teams: cohesion, conflict, and new venture performance," Journal of Business Venturing, Elsevier, vol. 17(4), pages 365-386, July.
    2. Davidsson, Per & Honig, Benson, 2003. "The role of social and human capital among nascent entrepreneurs," Journal of Business Venturing, Elsevier, vol. 18(3), pages 301-331, May.
    3. Siri Terjesen & Val Singh, 2008. "Female Presence on Corporate Boards: A Multi-Country Study of Environmental Context," Journal of Business Ethics, Springer, vol. 83(1), pages 55-63, November.
    4. Shane, Scott & Delmar, Frederic, 2004. "Planning for the market: business planning before marketing and the continuation of organizing efforts," Journal of Business Venturing, Elsevier, vol. 19(6), pages 767-785, November.
    5. Brush, Candida G. & Vanderwerf, Pieter A., 1992. "A comparison of methods and sources for obtaining estimates of new venture performance," Journal of Business Venturing, Elsevier, vol. 7(2), pages 157-170, March.
    6. Paul D. Reynolds & Nancy M. Carter & William B. Gartner & Patricia G. Greene, 2004. "The Prevalence of Nascent Entrepreneurs in the United States: Evidence from the Panel Study of Entrepreneurial Dynamics," Small Business Economics, Springer, vol. 23(4), pages 263-284, November.
    7. Talaulicar, Till & Grundei, Jens & Werder, Axel v., 2005. "Strategic decision making in start-ups: the effect of top management team organization and processes on speed and comprehensiveness," Journal of Business Venturing, Elsevier, vol. 20(4), pages 519-541, July.
    8. Carter, Nancy M. & Gartner, William B. & Reynolds, Paul D., 1996. "Exploring start-up event sequences," Journal of Business Venturing, Elsevier, vol. 11(3), pages 151-166, May.
    9. Martin Ruef, 2002. "Strong ties, weak ties and islands: structural and cultural predictors of organizational innovation," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 427-449, June.
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    Cited by:

    1. repec:kap:sbusec:v:50:y:2018:i:2:d:10.1007_s11187-016-9832-8 is not listed on IDEAS
    2. Simon Parker, 2014. "Who become serial and portfolio entrepreneurs?," Small Business Economics, Springer, vol. 43(4), pages 887-898, December.
    3. repec:kap:jtecht:v:42:y:2017:i:5:d:10.1007_s10961-017-9563-2 is not listed on IDEAS
    4. Diana Hechavarría & Charles Matthews & Paul Reynolds, 2016. "Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics," Small Business Economics, Springer, vol. 46(1), pages 137-167, January.
    5. Silke Tegtmeier & Agnieszka Kurczewska & Jantje Halberstadt, 2016. "Are women graduates jacquelines-of-all-trades? Challenging Lazear’s view on entrepreneurship," Small Business Economics, Springer, vol. 47(1), pages 77-94, June.
    6. Casey J. Frid & David M. Wyman & Bentley Coffey, 2016. "Effects of wealth inequality on entrepreneurship," Small Business Economics, Springer, vol. 47(4), pages 895-920, December.
    7. Tobias Kollmann & Christoph Stöckmann & Yvonne Meves & Julia M. Kensbock, 2017. "When members of entrepreneurial teams differ: linking diversity in individual-level entrepreneurial orientation to team performance," Small Business Economics, Springer, vol. 48(4), pages 843-859, April.
    8. Alex Coad & Sara Amoroso & Nicola Grassano, 2017. "Diversity in one dimension alongside greater similarity in others: evidence from FP7 cooperative research teams," The Journal of Technology Transfer, Springer, vol. 42(5), pages 1170-1183, October.
    9. MIYAKAWA Daisuke & TAKIZAWA Miho, 2013. "Time to IPO: Role of heterogeneous venture capital," Discussion papers 13022, Research Institute of Economy, Trade and Industry (RIETI).
    10. Alex Coad & Bram Timmermans, 2012. "Two's Company: Human Capital Composition and Performance of Entrepreneurial Pairs," DRUID Working Papers 12-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    11. repec:eee:jbvent:v:32:y:2017:i:6:p:694-706 is not listed on IDEAS
    12. Diana M. Hechavarría & Charles H. Matthews & Paul D. Reynolds, 2016. "Does start-up financing influence start-up speed? Evidence from the panel study of entrepreneurial dynamics," Small Business Economics, Springer, vol. 46(1), pages 137-167, January.

    More about this item

    Keywords

    New venture teams; Homophily; Team homogeneity; Team heterogeneity; Team diversity; New venture performance; L26; M12;

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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