How the founding team impacts the growth process of early stage innovative startups
DOI:
https://doi.org/10.7433/s97.2015.04Keywords:
entrepreneurship, startups, founding team, cluster analysisAbstract
Purpose of the paper: The paper aims at analysing the process of startup creation at its very early stage, investigating the connection between the distinctive traits of the entrepreneurs (the so-called “founding team”) and the arising profiles of their new ventures.
Methodology: The data are collected during the determinative initial phases of the venture creation. Specifically, a cluster analysis is applied on a sample of 107 Italian innovative startups and their 254 founders. The three emerging clusters show significant differences in terms of entrepreneurial profile and the startup’s fundraising ability.
Findings: Some specific traits of the entrepreneurial profile of the new venture (mainly the educational background and previous experience), may have an initial imprinting effect on its firm profile and, hence, its likelihood to grow and be successful.
Research and managerial implications: Work and international experience appear to be crucial success factors for startups at the very early stage. These characteristics prove to be strong enablers of fundraising, which happens to be vital at this particular time.
Research limitations: A cross-country analysis should be performed to better understand the positioning of the Italian startup ecosystem, and to overcome the country specificities of the sample.
Originality of the paper: The novelty of this work is represented by the exploration of a population on which we have no great prior knowledge, in a significant, yet peculiar, phase of its life. There are not many empirical/qualitative updated works related to the analysis of the characteristics of Italian startups and their founders.
References
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BECKMAN C.M. (2006), “The influence of founding team company affiliations on firm behavior”, Academy of Management Journal, vol. 49, n. 1, pp. 741-758.
BROCKHAUS R.H. (1980), “The effect of job dissatisfaction on the decision to start a business”, Journal of Small Business Management, vol. 18, n. 1, pp. 35-42.
CANNONE G., PISONI A., ONETTI A. (2014), “Born global companies founded by young entrepreneurs. A multiple case study”, International Journal of Entrepreneurship and Innovation Management, vol. 18, n. 2/3, pp. 210-232.
COLOMBO M.G., DELMASTRO M., GRILLI L. (2004), “Entrepreneurs’ human capital and the start-up size of new technology-based firms”, International Journal of Industrial Organization, vol. 22, n. 8, pp. 1183-1211.
COLOMBO M.G., GRILLI L. (2005), “Founders’ human capital and the growth of new technology-based firms: A competence-based view”, Research Policy, vol. 34, pp. 795-816.
COLOMBO M.G., GRILLI L. (2010), “On growth drivers of high-tech start-ups: Exploring the role of founders’ human capital and venture capital”, Journal of Business Venturing, vol. 25, n. 6, pp. 610-626.
COLOMBO M.G., PIVA E. (2012), “Firms’ genetic characteristics and competence-enlarging strategies: A comparison between academic and non-academic high-tech start-ups”, Research Policy, vol. 41, n. 1, pp. 79-92.
COOPER A.C., DAILY C.M. (1997), “Entrepreneurial teams”, in Sexton D.L., Smilor R.W. (Eds.), Entrepreneurship 2000, Upstart Publishing, Chicago, IL, pp. 127-150.
COOPER A.C., GIMENO-GASCON F.J., WOO C.Y. (1994), “Initial human and financial capital as predictors of new venture performance”, Journal of Business Venturing, vol. 9, n. 5, pp. 371-395.
CUERVO A., RIBEIRO D., ROIG S. (Eds.) (2010), Entrepreneurship: Concepts, Theory and Perspective, Springer-Verlag, Berlin Heidelberg.
DAHL M.S., REICHSTEIN T. (2007), “Are You Experienced? Prior Experience and the Survival of New Organizations”, Industry and Innovation, vol. 14, n. 5, pp. 497-511
DELMAR F., SHANE S. (2006), “Does experience matter? The effect of founding team experience on the survival and sales of newly founded ventures”, Strategic Organization, vol. 4, n. 3, pp. 215-247.
DYKE L.S., FISCHER E.M., REUBER A.R. (1992), “An Inter-industry Examination of the Impact of Owner Experience on Firm Performance”, Journal of Small Business Management, vol. 30, n. 4, pp. 72-87.
ENSLEY M.D., HMIELESKI K.M., PEARCE C.L. (2006), “The importance of vertical and shared leadership within new venture top management teams: Implications for the performance of startups”, Leadership Quarterly, vol. 17, n. 1, pp. 217-231.
FERN M.J., CARDINAL L.B., O’NEILL H.M. (2012), “The genesis of strategy in new ventures: escaping the constraints of founder and team knowledge”, Strategic Management Journal, vol. 33, pp. 427-447.
FREEMAN J.H. (1982), “Organizational life cycles and natural selection process”, in Staw, B. and Cummings, L. (Eds.), Research in Organizational Behavior, vol. 4, JAI Press, Greenwich, CT, pp. 1-32.
FOO DER M., WONG KAM P., ONG A. (2005), “Do others think you have a viable business idea? Team diversity and judges’ evaluation of ideas in a business plan competition”, Journal of Business Venturing, vol. 20, n. 3, pp. 385-402.
GARTNER W.B., SHAVER K.G., CARTER N.M., REYNOLDS P.D. (Eds.) (2004), Handbook of Entrepreneurial Dynamics: The Process of Business Creation, Sage Publications, Thousand Oaks, CA.
GARTNER W.B., SHAVER K.G., GATEWOOD E.J., KATZ J.A. (1994), “Finding the entrepreneur in entrepreneurship”, Entrepreneurship Theory and Practice, vol. 18, n. 1, pp. 5-9.
GIMENO J., FOLTA T., COOPER A., WOO C. (1997), “Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms”, Administrative Science Quarterly, vol. 42, pp. 750-783.
GRANDI A., GRIMALDI R. (2003), “Exploring the Networking Characteristics of New Venture Founding Teams: A Study of Italian Academic Spin-off”, Small Business Economics, vol. 21, n. 4, pp. 329-341.
HATCH N.W., DYER J.H. (2004), “Human Capital and Learning as a Source of Sustainable Competitive Advantage”, Strategic Management Journal, vol. 25, pp. 1155-1178.
HAVEMAN H.A., COHEN L.E. (1994), “The ecological dynamics of careers: The impact of organizational founding, dissolution, and merger on job mobility”, American Journal of Sociology, pp. 104-152.
HMIELESKI K.M., ENSLEY M.D. (2007), “A contextual examination of new venture performance: Entrepreneur leadership behavior, top management team heterogeneity, and environmental dynamism”, Journal of Organizational Behavior, vol. 28, pp. 865-889.
IERAPETRITIS D.G., LAGOS D., BALOMENOU K.C. (2010), “Outlining the determinants of youth entrepreneurship in the Greek periphery”, International Journal of Entrepreneurship and Small Business, vol. 11, n. 2, pp. 205-217.
JOHNSON K.L., ARTHAUD-DAY M.L., RODE J.C., NEAR J.P. (2004), “Entrepreneurial Expectancies”, in Gartner W.B., Shaver K.G., Carter N.M., Reynolds P.D. (Eds.), Handbook of Entrepreneurial Dynamics: The Process of Business Creation, Sage Publications, Thousand Oaks, CA, pp. 163-170.
KETCHEN D.J., SHOOK C.L. (1996), “The application of cluster analysis in strategic management research: an analysis and critique”, Strategic Management Journal, vol. 17, n. 6, pp. 441-458.
KIRZNER I.M. (1978), Competition and Entrepreneurship, University of Chicago Press, Chicago, IL.
KLOTZ A.C., HMIELESKI K.M., BRADLEY B.H., BUSENITZ L.W. (2014), “New Venture Teams: A Review of the Literature and Roadmap for Future Research”, Journal of Management, vol. 40, n. 1, pp. 226-255.
LAZEAR E. (2004), “Balanced skills and entrepreneurship”, The American Economic Review, vol. 94, n. 2, pp. 208-211.
MARCH J.G. (1991), “Exploration and exploitation in organizational learning”, Organization Science, vol. 2, n. 1, pp. 71-87.
ONETTI A., ZUCCHELLA A., JONES M.V., MCDOUGALL P.P. (2012), “Internationalization, Innovation and Entrepreneurship: Business Models for New Technology-based Firms”, Journal of Management and Governance, vol. 16, n. 3, pp. 337-368.
PRESUTTI M., ONETTI A., ODORICI V. (2008), “Serial Entrepreneurship and Born-Global New Ventures. A Case Study”, International Review of Entrepreneurship, vol. 6, n.4, pp. 255-278.
PUNJ G., STEWART D.W. (1983), “Cluster analysis in marketing research: review and suggestions for application”, Journal of Marketing Research, vol. 20, n. 2, pp. 134-148.
RAUCH A., RIJSDIJK S.A. (2013), “The Effects of General and Specific Human Capital on Long-Term Growth and Failure of Newly Founded Businesses”, Entrepreneurship Theory and Practice, vol. 37, n. 4, pp. 923-94.
REYNOLDS P.D. (2004), “Overview: Life Context, Personal Background”, in Gartner W.B., Shaver K.G., Carter N.M. and Reynolds P.D. (Eds.), Handbook of Entrepreneurial Dynamics: The Process of Business Creation, Sage Publications, Thousand Oaks, CA, pp. 3-11.
SAPIENZA H., GRIMM C. (1997), “Founder characteristics, start-up process and strategy/structure variables as predictors of shortline railroad performance”, Entrepreneurship Theory and Practice, vol. 22, n. 1, pp. 5-24.
SHANE S.A. (2000), “Prior knowledge and the discovery of entrepreneurial opportunities”, Organization Science, vol. 11, n. 4, pp. 448-469.
SHANE S.A., CABLE D. (2002), “Network ties, reputation, and the financing of new ventures”, Management Science, vol. 48, n. 3, pp. 364-381.
SHANE S.A., KHURANA R. (2003), “Bringing individuals back in: the effects of career experience on new firm founding”, Industrial and Corporate Change, vol. 12, n. 3, pp. 519-543.
SHAVER K.G. (1985), The attribution of blame: Causality, responsibility, and blameworthiness, Springer-Verlag, New York, NY.
SHEEHY G. (1976), Passages: Predictable Crisis of Adult Life, Dutton, New York.
STEFFENS P., TERJESEN S., DAVIDSSON P. (2012), “Birds of a feather get lost together: new venture team composition and performance”, Small Business Economics, vol. 39, n. 3, pp. 727-743.
STOCK R.M., ZACHARIAS N.A. (2011), “Patterns and performance outcomes of innovation orientation”, Journal of the Academy of Marketing Science, vol. 39, n. 6, pp. 870-888.
TIMMONS J.A., SPINELLI S. (1994), New venture creation: Entrepreneurship for the 21st century, Irwin, Boston, MA.
TIMMONS J.A., SPINELLI S.J. (2010), New Venture Creation, Entrepreneurship for the 21st Century, McGraw Hill International Edition, New York.
UCBASARAN D., LOCKETT A., WRIGHT M., WESTHEAD P. (2003), “Entrepreneurial founder teams: Factors associated with member entry and exit”, Entrepreneurship Theory and Practice, vol. 28, n. 1, pp. 107-127.
WARD J. (1963), “Hierarchical Grouping to Optimize an Objective Function”, Journal of the American Statistical Association, vol. 58, n. 301, pp. 236-244.
WEDEL M., KAMAKURA W. (2002), “Introduction to the special issue on market segmentation, International”, Journal of Research in Marketing, vol. 19, n. 3, pp. 181-183.
WRIGHT M., HMIELESKI K.M., SIEGEL D., ENSLEY M.D. (2007), “The role of human capital in technological entrepreneurship”, Entrepreneurship Theory and Practice, vol. 31, n. 6, pp. 791-806.
ZACHER H., FRESE M. (2011), “Maintaining a focus on opportunities at work: the interplay between age, job complexity, and the use of selection, optimization, and compensation strategies”, Journal of Organizational Behavior, vol. 32, n. 2, pp. 291-318.
AUDRETSCH D.B. (2003), “Entrepreneurship policy and the strategic management of places”, in Hart D.M. (Ed.), The emergence of entrepreneurship policy, Cambridge University Press, New York, NY, pp. 20-38.
BECKMAN C.M. (2006), “The influence of founding team company affiliations on firm behavior”, Academy of Management Journal, vol. 49, n. 1, pp. 741-758.
BROCKHAUS R.H. (1980), “The effect of job dissatisfaction on the decision to start a business”, Journal of Small Business Management, vol. 18, n. 1, pp. 35-42.
CANNONE G., PISONI A., ONETTI A. (2014), “Born global companies founded by young entrepreneurs. A multiple case study”, International Journal of Entrepreneurship and Innovation Management, vol. 18, n. 2/3, pp. 210-232.
COLOMBO M.G., DELMASTRO M., GRILLI L. (2004), “Entrepreneurs’ human capital and the start-up size of new technology-based firms”, International Journal of Industrial Organization, vol. 22, n. 8, pp. 1183-1211.
COLOMBO M.G., GRILLI L. (2005), “Founders’ human capital and the growth of new technology-based firms: A competence-based view”, Research Policy, vol. 34, pp. 795-816.
COLOMBO M.G., GRILLI L. (2010), “On growth drivers of high-tech start-ups: Exploring the role of founders’ human capital and venture capital”, Journal of Business Venturing, vol. 25, n. 6, pp. 610-626.
COLOMBO M.G., PIVA E. (2012), “Firms’ genetic characteristics and competence-enlarging strategies: A comparison between academic and non-academic high-tech start-ups”, Research Policy, vol. 41, n. 1, pp. 79-92.
COOPER A.C., DAILY C.M. (1997), “Entrepreneurial teams”, in Sexton D.L., Smilor R.W. (Eds.), Entrepreneurship 2000, Upstart Publishing, Chicago, IL, pp. 127-150.
COOPER A.C., GIMENO-GASCON F.J., WOO C.Y. (1994), “Initial human and financial capital as predictors of new venture performance”, Journal of Business Venturing, vol. 9, n. 5, pp. 371-395.
CUERVO A., RIBEIRO D., ROIG S. (Eds.) (2010), Entrepreneurship: Concepts, Theory and Perspective, Springer-Verlag, Berlin Heidelberg.
DAHL M.S., REICHSTEIN T. (2007), “Are You Experienced? Prior Experience and the Survival of New Organizations”, Industry and Innovation, vol. 14, n. 5, pp. 497-511
DELMAR F., SHANE S. (2006), “Does experience matter? The effect of founding team experience on the survival and sales of newly founded ventures”, Strategic Organization, vol. 4, n. 3, pp. 215-247.
DYKE L.S., FISCHER E.M., REUBER A.R. (1992), “An Inter-industry Examination of the Impact of Owner Experience on Firm Performance”, Journal of Small Business Management, vol. 30, n. 4, pp. 72-87.
ENSLEY M.D., HMIELESKI K.M., PEARCE C.L. (2006), “The importance of vertical and shared leadership within new venture top management teams: Implications for the performance of startups”, Leadership Quarterly, vol. 17, n. 1, pp. 217-231.
FERN M.J., CARDINAL L.B., O’NEILL H.M. (2012), “The genesis of strategy in new ventures: escaping the constraints of founder and team knowledge”, Strategic Management Journal, vol. 33, pp. 427-447.
FREEMAN J.H. (1982), “Organizational life cycles and natural selection process”, in Staw, B. and Cummings, L. (Eds.), Research in Organizational Behavior, vol. 4, JAI Press, Greenwich, CT, pp. 1-32.
FOO DER M., WONG KAM P., ONG A. (2005), “Do others think you have a viable business idea? Team diversity and judges’ evaluation of ideas in a business plan competition”, Journal of Business Venturing, vol. 20, n. 3, pp. 385-402.
GARTNER W.B., SHAVER K.G., CARTER N.M., REYNOLDS P.D. (Eds.) (2004), Handbook of Entrepreneurial Dynamics: The Process of Business Creation, Sage Publications, Thousand Oaks, CA.
GARTNER W.B., SHAVER K.G., GATEWOOD E.J., KATZ J.A. (1994), “Finding the entrepreneur in entrepreneurship”, Entrepreneurship Theory and Practice, vol. 18, n. 1, pp. 5-9.
GIMENO J., FOLTA T., COOPER A., WOO C. (1997), “Survival of the fittest? Entrepreneurial human capital and the persistence of underperforming firms”, Administrative Science Quarterly, vol. 42, pp. 750-783.
GRANDI A., GRIMALDI R. (2003), “Exploring the Networking Characteristics of New Venture Founding Teams: A Study of Italian Academic Spin-off”, Small Business Economics, vol. 21, n. 4, pp. 329-341.
HATCH N.W., DYER J.H. (2004), “Human Capital and Learning as a Source of Sustainable Competitive Advantage”, Strategic Management Journal, vol. 25, pp. 1155-1178.
HAVEMAN H.A., COHEN L.E. (1994), “The ecological dynamics of careers: The impact of organizational founding, dissolution, and merger on job mobility”, American Journal of Sociology, pp. 104-152.
HMIELESKI K.M., ENSLEY M.D. (2007), “A contextual examination of new venture performance: Entrepreneur leadership behavior, top management team heterogeneity, and environmental dynamism”, Journal of Organizational Behavior, vol. 28, pp. 865-889.
IERAPETRITIS D.G., LAGOS D., BALOMENOU K.C. (2010), “Outlining the determinants of youth entrepreneurship in the Greek periphery”, International Journal of Entrepreneurship and Small Business, vol. 11, n. 2, pp. 205-217.
JOHNSON K.L., ARTHAUD-DAY M.L., RODE J.C., NEAR J.P. (2004), “Entrepreneurial Expectancies”, in Gartner W.B., Shaver K.G., Carter N.M., Reynolds P.D. (Eds.), Handbook of Entrepreneurial Dynamics: The Process of Business Creation, Sage Publications, Thousand Oaks, CA, pp. 163-170.
KETCHEN D.J., SHOOK C.L. (1996), “The application of cluster analysis in strategic management research: an analysis and critique”, Strategic Management Journal, vol. 17, n. 6, pp. 441-458.
KIRZNER I.M. (1978), Competition and Entrepreneurship, University of Chicago Press, Chicago, IL.
KLOTZ A.C., HMIELESKI K.M., BRADLEY B.H., BUSENITZ L.W. (2014), “New Venture Teams: A Review of the Literature and Roadmap for Future Research”, Journal of Management, vol. 40, n. 1, pp. 226-255.
LAZEAR E. (2004), “Balanced skills and entrepreneurship”, The American Economic Review, vol. 94, n. 2, pp. 208-211.
MARCH J.G. (1991), “Exploration and exploitation in organizational learning”, Organization Science, vol. 2, n. 1, pp. 71-87.
ONETTI A., ZUCCHELLA A., JONES M.V., MCDOUGALL P.P. (2012), “Internationalization, Innovation and Entrepreneurship: Business Models for New Technology-based Firms”, Journal of Management and Governance, vol. 16, n. 3, pp. 337-368.
PRESUTTI M., ONETTI A., ODORICI V. (2008), “Serial Entrepreneurship and Born-Global New Ventures. A Case Study”, International Review of Entrepreneurship, vol. 6, n.4, pp. 255-278.
PUNJ G., STEWART D.W. (1983), “Cluster analysis in marketing research: review and suggestions for application”, Journal of Marketing Research, vol. 20, n. 2, pp. 134-148.
RAUCH A., RIJSDIJK S.A. (2013), “The Effects of General and Specific Human Capital on Long-Term Growth and Failure of Newly Founded Businesses”, Entrepreneurship Theory and Practice, vol. 37, n. 4, pp. 923-94.
REYNOLDS P.D. (2004), “Overview: Life Context, Personal Background”, in Gartner W.B., Shaver K.G., Carter N.M. and Reynolds P.D. (Eds.), Handbook of Entrepreneurial Dynamics: The Process of Business Creation, Sage Publications, Thousand Oaks, CA, pp. 3-11.
SAPIENZA H., GRIMM C. (1997), “Founder characteristics, start-up process and strategy/structure variables as predictors of shortline railroad performance”, Entrepreneurship Theory and Practice, vol. 22, n. 1, pp. 5-24.
SHANE S.A. (2000), “Prior knowledge and the discovery of entrepreneurial opportunities”, Organization Science, vol. 11, n. 4, pp. 448-469.
SHANE S.A., CABLE D. (2002), “Network ties, reputation, and the financing of new ventures”, Management Science, vol. 48, n. 3, pp. 364-381.
SHANE S.A., KHURANA R. (2003), “Bringing individuals back in: the effects of career experience on new firm founding”, Industrial and Corporate Change, vol. 12, n. 3, pp. 519-543.
SHAVER K.G. (1985), The attribution of blame: Causality, responsibility, and blameworthiness, Springer-Verlag, New York, NY.
SHEEHY G. (1976), Passages: Predictable Crisis of Adult Life, Dutton, New York.
STEFFENS P., TERJESEN S., DAVIDSSON P. (2012), “Birds of a feather get lost together: new venture team composition and performance”, Small Business Economics, vol. 39, n. 3, pp. 727-743.
STOCK R.M., ZACHARIAS N.A. (2011), “Patterns and performance outcomes of innovation orientation”, Journal of the Academy of Marketing Science, vol. 39, n. 6, pp. 870-888.
TIMMONS J.A., SPINELLI S. (1994), New venture creation: Entrepreneurship for the 21st century, Irwin, Boston, MA.
TIMMONS J.A., SPINELLI S.J. (2010), New Venture Creation, Entrepreneurship for the 21st Century, McGraw Hill International Edition, New York.
UCBASARAN D., LOCKETT A., WRIGHT M., WESTHEAD P. (2003), “Entrepreneurial founder teams: Factors associated with member entry and exit”, Entrepreneurship Theory and Practice, vol. 28, n. 1, pp. 107-127.
WARD J. (1963), “Hierarchical Grouping to Optimize an Objective Function”, Journal of the American Statistical Association, vol. 58, n. 301, pp. 236-244.
WEDEL M., KAMAKURA W. (2002), “Introduction to the special issue on market segmentation, International”, Journal of Research in Marketing, vol. 19, n. 3, pp. 181-183.
WRIGHT M., HMIELESKI K.M., SIEGEL D., ENSLEY M.D. (2007), “The role of human capital in technological entrepreneurship”, Entrepreneurship Theory and Practice, vol. 31, n. 6, pp. 791-806.
ZACHER H., FRESE M. (2011), “Maintaining a focus on opportunities at work: the interplay between age, job complexity, and the use of selection, optimization, and compensation strategies”, Journal of Organizational Behavior, vol. 32, n. 2, pp. 291-318.
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2015-08-29
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