Entrepreneurial Founder Team Composition and Its Influence on Firm Performance: A Social Capital Perspective Open Access
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There is a rich history in the entrepreneurship literature investigating “who is an entrepreneur.” This inquiry has been performed in various ways: the trait approach which looks at an individual’s makeup such as their personality; the cognitive approach which looks at an individual’s mental processes; the behavioral approach which looks at an individual’s actions; and the social/cultural approach which looks at how social networks and society influence an individual’s desire to and manner in which they perform the act of entrepreneurship. However, the majority of firms are founded by teams rather than individuals which is a possible explanation for a lack of repeatable and generalizable findings in these historic studies.In looking into the innovation literature, there is a heavy focus on teams and teamwork and how the composition of teams influences innovative output. The ways in which team composition is operationalized is generally based on demographic diversity, shared prior educational or work experience, and/or the complementarity of skillsets or functional role within the team. There is also a rich body of research illustrating how innovation is driven by social networks, both in terms of access to information and diffusion of new products or services. However, this research stream is lacking in terms of how the interplay of team members’ respective traits, cognition, and behaviors influence the performance of the team.This study is a step toward filling this identified gap in the research, examined through the lens of social networks. Using a multi-source, multi-method approach, this study evaluates how the entrepreneurial founder team (“EFT”) composition, operationalized as the distance between EFT members in terms of personality, mental models, and innovative behavior, influences both social capital and firm performance. Social capital as a mediator of the relationship between entrepreneurial founder team composition and firm performance is also proposed and evaluated. Two forms of social capital are utilized in these analyses: intra-organizational bonding social capital, operationalized as the frequency of communication in various forms between EFT members, the degree of personal and professional trust amongst EFT members, and the degree with which EFT members seek personal and professional advice from one another; and inter-organizational bridging social capital, operationalized as the total number of firm contacts, the number of shared contacts between EFT members, and number of structural holes occupied by the firm based on egonets captured from EFT members’ professional online networks through a new and novel data collection instrument.