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The purpose of this paper is to investigate and compare what criteria novice and habitual entrepreneurs use while adding members to the founding team.

This paper uses conjoint analysis (CA) to provide the order of preference for the “choice attributes.” The logic of CA is that even if two or more attributes influence the choice, it is unlikely that those attributes will have equal importance for founders with different entrepreneurial experiences.

This paper found a significant difference in the ranking of the attributes by novice and habitual entrepreneurs. In novice entrepreneurs, the effect of direct ties in the form of kinship ties has the highest preference, followed by prior social contact and prior work relations. However, personal friendships and resource dependency received lesser importance than interpersonal attraction because of the similarity in vision, beliefs and values. Habitual entrepreneurs, however, valued resource dependency and prior work relations more than kinship ties. Also, unlike novice entrepreneurs, habitual entrepreneurs sought cofounders from their indirect ties.

There has been an explosion of interest and funding for programs that help entrepreneurs establish a cofounding team. The authors inform these programs related to the decision concerning assisting novice and habitual entrepreneurs.

While prior studies examined a single attribute at a time, the strength of this study lies in simultaneously tapping all attributes, along with multiple indicators for each attribute. Additionally, this study distinguishes the selection criteria of cofounders based on the entrepreneurial expertise of the lead founder.