We advance entrepreneurship research by developing a theoretical model of how founding teams form. Our neo-Carnegie model situates nascent founders in particular network-structural milieus, engaging in aspiration-driven search for and evaluation of prospective co-founders. The formation of co-founding ties between nascent founders can be divided into four theoretical steps, which we label activation, evaluation, approach, and reciprocation. Successful founding team formation is a consequence of mutually favorable evaluations by nascent founders in a multi-sided matching process. Nascent founders with higher and less flexible aspirations are more likely to undertake distant search for co-founders by seeking referrals, forming ties with strangers, and forming new ties to social foci where they might meet potential co-founders. Churn in newly formed founding teams emerges as a consequence of shifting dominant coalition dynamics in the founding team caused by organic venture evolution and intentional changes in strategic direction. Our theoretical model provides new insights on the formation pathways of founding teams, their initial task and relational resource endowments, and initial team dynamics.
For their constructive comments on earlier drafts of this paper we thank the co-editors of this volume of Research in the Sociology of Organizations and Teppo Felin, Gerry George, Henrich Greve, Phanish Puranam and Wesley Sine. We are also grateful for feedback received from audiences at the Mack Institute Emerging Scholars Workshop, the Strategic Management Society Special Conference in Copenhagen, the Strategic Management Society Annual Conference in Paris, the Academy of Management Annual Meeting in Chicago, the “Reversing the Arrow” Conference on Entrepreneurship and Society, and research seminars at INSEAD and the University of British Columbia. We gratefully acknowledge research funding received from the INSEAD Alumni Fund.
Clough, D.R. and Vissa, B. (2022), "How Do Founding Teams Form? Toward a Behavioral Theory of Founding Team Formation", Eberhart, R.N., Lounsbury, M. and Aldrich, H.E. (Ed.) Entrepreneurialism and Society: Consequences and Meanings (Research in the Sociology of Organizations, Vol. 82), Emerald Publishing Limited, Leeds, pp. 115-147. https://doi.org/10.1108/S0733-558X20220000082006
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