Entrepreneurial Founder Teams: Factors Associated with Member Entry and Exit

Authors


  • Deniz Ucbasaran is lecturer in Economics of Enterprise, Nottingham University Business School, UK.

  • Andy Lockett is lecturer in strategy, Nottingham University Business School, UK.

  • Mike Wright is professor of financial studies and director of the Centre for Management Buyout Research at Nottingham University Business School. He is also a visiting professor at Erasmus University and INSEAD, and an editor of the Journal of Management Studies.

  • Acknowledgments: We thank the participants at the Global Entrepreneurship Conference, 2001, Lyon, France, and the Babson-Kauffman Entrepreneurship Research Conference, 2001, Jönköping, Sweden, for their valuable comments. The 1990/91 SARIE database was collected in association with Sue Birley. We would also like to thank Ada Karman Lei for her assistance in collecting the data in 2000. The insightful comments of Ray Bagby and two anonymous reviewers are appreciated. Opinions (and the potential errors) expressed in this articles are, of course, the authors’ alone.

Deniz Ucbasaran at the Nottingham University Business School, Jubilee Campus. E-mail deniz.ucbasaran@nottingham.ac.uk.

Abstract

This exploratory study provides a review of the neglected area of entrepreneurial founder team turnover. A novel distinction is made between entrepreneurial founder team member entry and team member exit. Ninety owner-managed ventures were monitored between 1990 and 2000. Presented hypotheses relating to a team's human capital were explored using multivariate logistic regression analysis. Variables associated with entry were found not to be the same as those associated with exit. The size of the founding team was significantly negatively associated with subsequent team member entry. The link between team turnover and entrepreneurial team heterogeneity was mixed. Functional heterogeneity was weakly significantly positively associated with team member entry. Heterogeneity of prior entrepreneurial experience was significantly positively associated with team member exit. In addition, family firms were significantly negatively associated with team member exit. The average age of the team was not significantly associated with team member entry or exit. Additional insights in future research may be gathered if a broader definition of team turnover (i.e., considering team member entry and exit) is considered. Practitioner awareness of the different factors associated with team member entry and exit may encourage them to provide assistance, which facilitates the team building process over time in developing firms. Promising areas for additional research are highlighted.

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