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The Fragile Success of Team Start-ups

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  • Veronique Schutjens
  • Erik Stam

Abstract

This article describes the benefits and pitfalls of starting a firm with an entrepreneurial team, drawing on a longitudinal empirical analysis of the life course of 90 team start-ups and 1196 solo start-ups in the Netherlands. In the first three years of their existence, team start-ups perform better than solo start-ups on several success indicators. However, after this start phase, entrepreneurial teams face particular problems in realizing further growth. These team-specific bottlenecks can even threaten firm survival. In later life course phases we found a clear distinction between entrepreneurial teams with stagnating growth and teams that succeeded in solving these problems and went on to realize further growth.

Suggested Citation

  • Veronique Schutjens & Erik Stam, "undated". "The Fragile Success of Team Start-ups," Papers on Entrepreneurship, Growth and Public Policy 2005-17, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    • Handle: RePEc:esi:egpdis:2005-17
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    File URL: ftp://papers.econ.mpg.de/egp/discussionpapers/2005-17.pdf
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    References listed on IDEAS

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    1. Judith B. Kamm & Jeffrey C. Shuman & John A. Seeger & Aaron J. Nurick, 1990. "Entrepreneurial Teams in New Venture Creation: A Research Agenda," Entrepreneurship Theory and Practice, , vol. 14(4), pages 7-17, July.
    2. 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.
    3. Veronique A.J.M. Schutjens & Egbert Wever, 2000. "Determinants of new firm success," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 135-153.
    4. Garnsey, Elizabeth, 1998. "A Theory of the Early Growth of the Firm," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(3), pages 523-556, September.
    5. Westhead, Paul & Wright, Mike, 1998. "Novice, portfolio, and serial founders: are they different?," Journal of Business Venturing, Elsevier, vol. 13(3), pages 173-204, May.
    6. Thakur, Sanjay Prasad, 1999. "Size of investment, opportunity choice and human resources in new venture growth: Some typologies," Journal of Business Venturing, Elsevier, vol. 14(3), pages 283-309, May.
    7. Yasemin Y. Kor, 2003. "Experience-Based Top Management Team Competence and Sustained Growth," Organization Science, INFORMS, vol. 14(6), pages 707-719, December.
    8. Clarysse, Bart & Moray, Nathalie, 2004. "A process study of entrepreneurial team formation: the case of a research-based spin-off," Journal of Business Venturing, Elsevier, vol. 19(1), pages 55-79, January.
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    Citations

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    Cited by:

    1. Audretsch, David & Stam, Erik & Meijaard, Joris, 2005. "Renascent Men or Entrepreneurship as a One-Night Stand: Entrepreneurial Intentions Subsequent to Firm Exit," CEPR Discussion Papers 5342, C.E.P.R. Discussion Papers.
    2. Andreas Koch & Jochen Späth & Harald Strotmann, 2013. "The role of employees for post-entry firm growth," Small Business Economics, Springer, vol. 41(3), pages 733-755, October.
    3. Erik Stam & David Audretsch & Joris Meijaard, 2009. "Renascent entrepreneurship," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 223-237, Springer.
      • Stam, F.C. & Audretsch, D.B. & Meijaard, J., 2006. "Renascent Entrepreneurship," ERIM Report Series Research in Management ERS-2006-017-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Veronique Schutjens & Erik Stam, 2006. "Starting anew: Entrepreneurial intentions and realizations subsequent to business closure," Papers on Entrepreneurship, Growth and Public Policy 2006-10, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    5. Elli Diakanastasi & Angeliki Karagiannaki & Katerina Pramatari, 2018. "Entrepreneurial Team Dynamics and New Venture Creation Process: An Exploratory Study Within a Start-Up Incubator," SAGE Open, , vol. 8(2), pages 21582440187, June.
    6. Erik Stam & David Audretsch & Joris Meijaard, 2006. "Renascent Entrepreneurship - Entrepreneurial Preferences Subsequent to Firm Exit," Papers on Entrepreneurship, Growth and Public Policy 2006-06, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.

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    More about this item

    Keywords

    entrepreneurial teams; start-ups; firm growth; life course analysis;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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