New Venture Teams: A Review of the Literature and Roadmap for Future Research

As entrepreneurship research has matured, scholars have increasingly recognized that the formation of new ventures is commonly accomplished by teams as opposed to lone entrepreneurs. Over the past two decades, the upper echelons perspective has served as the primary lens for investigating new venture team functioning and performance. However, researchers have begun to move beyond the relationship between team characteristics and team outcomes, to explore intermediary mechanisms that more precisely explain how team inputs lead to team effectiveness. In this article we apply an inputs-mediators-outcomes framework, which has served as a foundation for teams research in organizational behavior over the past 50 years, to first organize and review prior work on new venture teams, and then to provide a roadmap for future research. By integrating the upper echelons approach from strategic management with the inputs-mediators-outcomes framework from organizational behavior, we clarify what is known about new venture teams and shed light on important issues that could help the field of entrepreneurship to develop a more comprehensive understanding of why some new venture teams, but not others, achieve successful outcomes.Keywords: upper echelon, entrepreneurship, group processes, founding teams, new venture teams, top management teamsKeywords: upper echelon, entrepreneurship, group processes, founding teams, new venture teams, top management team

The Importance of Vertical and Shared Leadership within New Venture Top Management Teams: Implications for the Performance of Startups

The current study investigated the relative influence of vertical versus shared leadership within new venture top management teams on the performance of startups using two different samples. Vertical leadership stems from an appointed or formal leader of a team (e.g., the CEO), whereas shared leadership is a form of distributed leadership stemming from within a team. Transformational, transactional, empowering, and directive dimensions of both vertical and shared leadership were examined. New venture performance was considered in terms of revenue growth and employee growth. The first sample was comprised of 66 top management teams of firms drawn from Inc. Magazine’s annual list of America’s 500 fastest growing startups. The seconded sample consisted of 154 top management teams of startups randomly drawn from Dun and Bradstreet, which compiles the most extensive database available for identifying relatively young American-based ventures. Both vertical and shared leadership were found to be highly significant predictors of new venture performance. Further, hierarchical regression analysis found the shared leadership variables to account for a significant amount of variance in new venture performance beyond the vertical leadership variables. These results were consistent across both samples, thus providing robust evidence for the value of shared leadership, in addition to the more traditional concept of vertical leadership

The contrasting interaction effects of improvisational behavior with entrepreneurial self-efficacy on new venture performance and entrepreneur work satisfaction

Although improvisation is often considered to be an elemental component of entrepreneurship, little work has been done to evaluate factors that influence the relationship of entrepreneur improvisational behavior with important outcome variables. In an attempt to partly fill this gap, the current study examines the moderating effect of entrepreneurial self-efficacy on the relationship of founders' improvisational behavior with both the performance of their startups and their individual level of work satisfaction using a national (United States) random sample of 159 entrepreneurs. In alignment with our predictions, improvisational behavior was found to have a positive relationship with new venture performance (i.e., sales growth) when exhibited by founders who were high in entrepreneurial self-efficacy, whereas improvisational behavior was found to have a negative relationship with new venture performance when exhibited by founders who were low in entrepreneurial self-efficacy. Contrary to our expectations, entrepreneurial self-efficacy was found to have a negative moderating effect on the relationship between entrepreneur improvisational behavior and work satisfaction.