Startups whose founders like each other due to shared values and experiences, and have the proper complementary skills, can foster better team dynamics and have more success raising funds and being productive, new research shows.
"Forming Entrepreneurial Teams: Mixing Business and Friendship to Create Transactive Memory Systems for Enhanced Success," published in the Academy of Management Journal, looks at how startup founders form teams and how their formation strategy affects the new venture.
There are basically two ways co-founders find each other, researchers say. The first is through existing interpersonal relationships. The second is by finding people who have the skills needed to build the business.
A hybrid formation strategy works best, but few startups – about 1 in 10 – actually use it, says co-author Brent Goldfarb, an associate professor at the University of Maryland's Robert H. Smith School of Business.
"Creating teams requires intentional thought and attention," says Smith School professor Rajshree Agarwal. "It's going to be hard, and it's going to be rare, but if you do it, there are huge performance benefits."
From University of Maryland
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