Forming Entrepreneurial Teams: Mixing Business and Friendship to Create Transactive Memory Systems for Enhanced Success

Successfully navigating through critical uncertainties during the incipient stages requires

new ventures to develop learning systems, and building the right team may be key in this process.

Drawing on prior work indicating that entrepreneurial teams form using either an interpersonal-attraction strategy (relationships with similar others in a close network) or a resource-seeking

strategy (instrumental focus on complementary skills), we theorize that a dual formation strategy,

although challenging to execute, is critical for early performance. Using dual formation strategies

from the onset fosters the development of stronger transactive memory systems, because close

relationships facilitate smooth coordination among founders specializing in complementary tasks.

Transactive memory systems thus mediate the relationship between formation strategies and early

entrepreneurial success. Findings from two field observational studies and a field intervention

study support our theory: teams formed based on a dual strategy raised greater seed funding on

Kickstarter – a leading crowdfunding platform (Study 1), were more successful in a prestigious

entrepreneurial competition (Study 2), and gained more profits from selling their initial products

(Study 3). Our research advances knowledge on entrepreneurial team formation and offers

practical recommendations to facilitate this process at such nascent, but critical stages.

https://par.nsf.gov/servlets/purl/10272194