Session 229

Who Founds and how the Founding Team Impacts the Entrepreneurial Firm?

Track K

Date: Monday, September 22, 2014


Time: 16:30 – 17:45

Common Ground

Room: Moscu


  • Lyda Bigelow, University of Utah

Title: Equity Division among Networks of Founders


  • Mohammad Keyhani, University of Calgary

Abstract: Team ventures can grow so profitable that minor changes in equity division can translate into millions of dollars lost or gained by founders. Yet there is a discernable lack of research to base equity division decisions on. We argue that a formal approach to the study of equity division arrangements needs to consider not only the value of each founder’s respective contributions and outside opportunity costs, but also the heavy influence of the pre-existing relationships between founders, some with stronger ties than others. We outline the advantages of the Shapley value in cooperative game theory as a basis for equity division decisions, and also demonstrate how extensions of this value to network-restricted games can incorporate network structure and relationship information into equity division decisions.

Title: Foregone Conclusions: Presdestination in New Ventures' Strategies


  • Bart Clarysse, ETH Zurich
  • Anneleen Van Boxstael, Ghent University
  • Mike Wright, Imperial College London

Abstract: We build on the evolving literature on the role of pre-founding knowledge by exploring the missing link regarding how individual experiences are shaped pre-founding and are then translated into venture-level actions post founding. We combine an ethnographic study at a newly formed technology venture with in-depth analysis of the 3016-page pre-founding communication log between the new venture founding team members during the entire process of founding team formation. We show that three accumulation mechanisms, socialization, experimentation and imitation shape a shared understanding about the new venture’s strategy. We suggest that this shared understanding leads to entrenched actions in a powerful and causative manner and that founders develop post-founding actions to reinforce this shared understanding.

Title: Founder Origin, Technology Strategy and Growth of Technology-Based Spin-Off Companies


  • Lars Bengtsson, Lund University
  • Ola Alexanderson, Lund University

Abstract: The most salient resources for a technology-based spin-off company are the knowledge endowed in the founder(s) and the technology transferred from the university or a corporation. In this paper we investigate if the founder origin and choice of technology strategy influence the long term growth of the technology-based spin-off company. We hypothesize that the origin of the founder(s) (academic or corporate) will affect long term (ten years) spin-off growth. Growth is however moderated by the spin-off’s choice of technology strategy. Here we differentiate between the spin-off companies’ technology strategies in terms of trying to exploit a broad technology or a more specific product-based technology. We also differentiate between the strategy of exploiting a new or a more established technology.

Title: Learning to Survive: Capitalizing on Initial Strategic Decisions and Founding Team Resources to Outlast the Financial Crisis


  • Michael Devaughn, University of St. Thomas
  • Myleen Leary, Montana State University

Abstract: Drawing on a sample of new community banks chartered in Florida in the decade prior to the onset of the financial crisis in the U.S. commercial banking industry, we use an organizational learning framework to investigate initial strategic decisions and several types of founding team resources to determine what role, if any, these factors may have played in helping or hindering banks to navigate the crisis.

Title: Taking the Plunge the Other Way Around


  • Suresh Bhagavatula, Indian Institute of Management - Bangalore
  • S Ramakrishna Velamuri, CEIBS
  • Edward Mungai, Strathmore University

Abstract: A small stream of entrepreneurship literature highlights that most new firms are started by a team of individuals and not lone entrepreneurs (Cooney, 2005; Kamm & Shuman, 1990). Given the importance of new firm management teams, it is worth considering what factors may influence an employee, who has not identified any entrepreneurial opportunity, to transition to a new firm management team. Individuals who transition from secure employment to join a new venture as an early lead employee play an important role in the success of these ventures. Early lead employees are just important as the founders but unlike the limelight the founders receive as the venture starts to scale these lead employees are rarely known to the external world. Consequently, it is important to understand how and why early lead employees join new ventures.

Title: The Performance Effects of Disrupting Founding Teams’ Prior Shared Experience through Job Hoppers


  • Florence Honore, Iowa State University

Abstract: Start-ups founded by team members with prior shared experience in incumbent firms perform better than other start-ups. While the prior shared experience brings relevant knowledge and coherent routines, it could also corner the start-ups in local search and limit innovation. I investigate how start-ups mitigate these negative aspects by including team members with experience in multiple prior jobs or industries, i.e. job hoppers. I find that teams with prior shared experience within the start-up industry benefit from job hoppers who worked outside the start-up industry and that teams with prior shared experience outside the start-up industry benefit from job hoppers who primarily worked in the start-up industry. Consequently, the job hoppers may embody the dual role of bringing disruption and critical knowledge to founding teams.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 386: Entrepreneurial Corporate Governance
Sun: 09:30 – 10:45
Session 387: Social Capital in Emerging Markets: Local, Glocal or Global?
Sun: 11:15 – 12:30
Session 462: Crowdfunding: State of the Art and Directions for Future Research
Sun: 15:45 – 17:00
Session 235: Cognitive and Behaviorial Perspectives of Entrepreneurial Decision Making
Session 380: Small, Young and Entrepreneurial Firms: A Unique Perspective in Globalization
Sun: 17:15 – 18:30
Session 607: Entrepreneurship and Strategy IG Business Meeting
Mon: 08:00 – 09:15
Session 227: Entrepreneurial Orientation, capabilities and firm performance
Session 445: Adaptation issues for Entrepreneurial Firms
Mon: 11:00 – 12:15
Session 232: Theory Building in the Field of Entrepreneurship
Session 440: Entrepreneurial Strategies in Emerging and International markets
Mon: 14:45 – 16:00
Session 231: Entrepreneurial Leadership: What it Takes to be a Successful Enterprise?
Session 457: Ownership and Funding Structures: Performance Implications for the entrepreneurial firms
Mon: 16:30 – 17:45
Session 226: Culture, Norms and Institutions: The contextual influences on Entrepreneurship
Session 229: Who Founds and how the Founding Team Impacts the Entrepreneurial Firm?
Tue: 08:00 – 09:15
Session 224: Funding an Entrepreneurial Venture: What Works and What Does Not?
Session 236: Universities, Academics and Incubators: The Role of Academic Institutions in Shaping Entrepreneurial Firm and Outcomes
Tue: 11:00 – 12:15
Session 230: TMTs as Firm Resources
Session 309: New Conversations on Business Models
Tue: 15:30 – 16:45
Session 225: Entrepreneurial Networks: Formation and Implications
Session 228: Dynamic Capabilities and Performance Implications for New Firms
Tue: 17:15 – 18:30
Session 234: Institutional, Industry and Firm Specific Impacts on Nascent Firms
Session 441: Funding Entrepreneurial Ventures: Sources and Successes

Strategic Management Society