Abstract
This paper examines the influence of team formation strategy on prospective entrepreneurs’ attraction toward venturing. With the worldwide increase in entrepreneurship education, the way entrepreneurial skills such as team formation are taught influences graduates’ chances of finding entrepreneurial success from the onset. This study measures how team formation strategies affect venturing and co-founding attraction. Moreover, the paper raises awareness for educators and researchers about the role and importance of various team formation strategies in entrepreneurship education. Hypotheses are tested using data collected from 1,713 business and entrepreneurship graduates using a quasi-experimental design with vignettes. Results and implications for entrepreneurship education and research are further discussed.
Introduction
Most entrepreneurial firms are founded in teams (Coad & Timmermans, 2014; Klotz et al., 2014; Wasserman, 2012), and partnering with the right people increases the chances of entrepreneurial success (Lazar et al., 2021). Thus, entrepreneurship education (EE) is often team-based (Mandel & Noyes, 2016; Neck & Greene, 2011; Welsh & Slack, 2022). As in real-life entrepreneurship EE, forming the right teams in EE is essential for team performance and learning (Bacon et al., 2019; Pearlstein, 2020, 2021). Entrepreneurship educators are often involved in either forming teams on behalf of students or leading student-driven team formation processes. Teams formed by educators often seek to match students based on competencies or motivations to boost creativity and innovation. However, such processes seldom mimic real-life team formation processes. Consequently, the approach fails to prepare students for life as entrepreneurs.
Students could form sustainable, high-performing teams with knowledge of when and how to apply specific team formation strategies (Pearlstein, 2021). These team formation skills could improve chances of entrepreneurial success post-graduation. However, little scholarly attention has been paid to the processes of engaging in entrepreneurial team formation (e.g., D’hont et al., 2016; Lazar et al., 2020; Shepherd et al., 2021), and many team-level processes in EE remain understudied (Hytti et al., 2010). This paper takes a quasi-experimental approach to answer the question of how team formation strategies in EE affect attraction toward venturing and co-founding.
Entrepreneurship and EE scholars have sought to understand how founding teams function effectively, yielding productive outcomes (e.g., Harper, 2008; Mol et al., 2015; Patzelt et al., 2021; Santos & Cardon, 2019). Thus far, studies have found conflicting results regarding team composition and subsequent performance (Hmieleski & Ensley, 2007; Jin et al., 2017; Karlsson & Nowell, 2021; Knockaert et al., 2011; Lazar et al., 2020), indicating that much hinges on factors, such as time, context, and situation (Hmieleski & Ensley, 2007). Because every entrepreneurial venture is unique, and the founding members often have different experiences, attributes, and mindsets, knowing how to apply team formation strategies in specific contexts will greatly benefit prospective entrepreneurs, EE students, and educators.
The process through which founders form new venture teams is termed ‘entrepreneurial team formation.’ Such a process is not easily reduced to simple rules or models. Instead, several individual judgments ultimately lead to pursuing team-based entrepreneurial ventures. Before engaging in entrepreneurial team formation, prospective entrepreneurs must first decide whether they are attracted to a venturing opportunity. Second, they will need to assess their attraction toward potential co-founders, weighing both skill complementarity and interpersonal fit. In addition to these foundational issues, other elements may play a role in constituting the entrepreneurial team, such as opportunity recognition, evaluation, exploitation (Wood & Mckelvie, 2015), cognitive characteristics (Ensley et al., 2000), and group values (Karlsson & Nowell, 2021). This paper seeks to understand how team formation strategies impact prospective entrepreneurs’ attraction toward venturing and co-founding in the context of EE. Emphasis is placed on venturing and co-founding attraction, as these elements could trigger entrepreneurial action (Shane & Venkataraman, 2000).
Following Kuratko (2005), entrepreneurship can be taught; as such, skills associated with entrepreneurial team formation, entrepreneurial skills, and intentions can be developed through EE (Fayolle et al., 2006; Kuratko, 2005; Zhang et al., 2014). For example, an essential entrepreneurial skill is selecting the right co-founder or deciding not to engage with a potential partner. While some entrepreneurs might ‘luck out’ on a potential co-founder, research informs us that teams founded using specific strategies have increased chances of success (e.g., Fu et al., 2022; Lazar et al., 2021; Shah et al., 2019). This observation suggests teaching team formation strategies early in EE can pave the way for more successful new ventures.
This study makes several meaningful contributions to the literature on entrepreneurial team formation and EE research by exploring how team formation strategies affect venturing and co-founding. Considering team formation strategies in early entrepreneurship, Lazar et al. (2021) argue that dual strategy teams outperform singular strategy teams. While dual strategy teams might be ‘ideal,’ the present study suggests that a singular strategy drives attractiveness toward venturing and engaging in co-founding. These results have implications for EE, highlighting a dissonance between ideal strategies and those EE and non-EE graduates are most attracted by, indicating that educators need to rethink how team formation is taught. The results of this study show that educators should carefully consider how students are teamed and with what knowledge they engage in teaming exercises, especially in venture creation programs, to maximize chances of future success. This is particularly important for educators seeking to form teams from a limited pool of students. Additionally, considering team formation to be an essential entrepreneurial skill and, as such, part of the general skill set necessary for success in dynamic modern occupations (Savickas et al., 2009), this study shows that team formation skills and strategies indeed should be part of EE.
Furthermore, research on entrepreneurial teams has typically employed a retrospective approach. For example, scholars have examined students or graduates engaged in EE (Karlsson & Nowell, 2021), nascent entrepreneurship (Agarwal, 2019; Lazar et al., 2021; Mollick, 2014), or those who have already enjoyed some entrepreneurial success (Shah et al., 2019). Selection and survivor biases can affect findings in this type of research (Agarwal, 2019). The present study addresses these issues through a prospective approach using a survey experiment conducted among recent graduates from a large Scandinavian business school. Graduates were prompted with a vignette in which a good friend or acquaintance with either similar or complementary skills presented them with a business idea. Respondents then assessed the attractiveness of venturing and co-founding with this particular person.
Theory and Hypothesis Development
Entrepreneurial Team Formation
The process of entrepreneurial team formation involves founders coming together with the shared objective of starting a new venture. Entrepreneurial teams differ from many other types of organizations because they are small, self-selected, and organically formed (Lazar et al., 2020). In addition, the entrepreneurial team formation process often also involves the selection of both the business idea and the partners to work with (Discua Cruz et al., 2013; Forbes et al., 2006). As a result, entrepreneurial teams can appear quite differently compared to other teams.
Research has emphasized how team characteristics (e.g., diversity, competencies, demographics, previous experiences) impact specific outcomes, such as venture performance, growth, or satisfaction (see Klotz et al., 2014 for a thorough review). However, results concerning the effects of team composition are mixed (Horwitz & Horwitz, 2007; Jin et al., 2017; Karlsson & Nowell, 2021; Lazar et al., 2020; Mol et al., 2015). Studies suggest that heterogeneous teams benefit from broader skill sets, more information, and more experience (Beckman, 2006; Beckman & Haunschild, 2002). Furthermore, diverse skill sets within entrepreneurial teams are associated with higher quality and more creative and innovative outcomes (Van Knippenberg et al., 2011). In practice, diversity in teams is often portrayed as a double-edged sword: it can lead to positive synergies but also increased tension and conflict (Horwitz & Horwitz, 2007). Too much diversity in personalities, values, and beliefs may lead to suboptimal teams, inhibiting learning (Jarvis, 2011) or making teams fall apart (Harrison & Klein, 2007). Homogeneous teams exhibit faster decision-making and execution (Beckman, 2006; Eisenhardt & Schoonhoven, 1990). In other words, the relationship between team composition and team performance is not as straightforward, and effects vary with task and context (Karlsson & Nowell, 2021).
While the literature on early-stage team development is growing, much detail about the incipient phases of entrepreneurial team formation remains unknown. Some research has concerned the origin of entrepreneurial teams, such as when a single lead entrepreneur with a business idea searches for co-founders to realize a business opportunity (e.g., Grossman et al., 2012; Kamm & Nurick, 1993) or when a group of founders collectively create a business (Forbes et al., 2006; Vohora et al., 2004). Other research has focused on the setting, social network, and sociocultural environment (Lazar et al., 2020) in which teams are formed, e.g., university spin-offs (Vohora et al., 2004) or accelerators (Clarysse et al., 2005; Lundqvist, 2014). This paper concerns team formation strategies, that is, how co-founders search for and select one another (Lazar et al., 2020). In this process, individuals may make use of a team formation strategy.
Strategies for Entrepreneurial Team Formation
In searching for and selecting a co-founder, the literature suggests that prospective entrepreneurs most often make use of one of three cognitive strategies (Lazar et al., 2020; Forbes et al., 2006): (1) a resource seeking strategy based on instrumental rationality, (2) an interpersonal attraction strategy based on similarity and homophily or (3) a dual strategy based on attention toward both similarity and functional complementarity.
The resource seeking (RS) strategy emphasizes instrumental focus on the composition of skills within the team (Forbes et al., 2006). A key aim of this strategy is teaming to fill the team’s perceived needs (Kamm & Nurick, 1993). In practice, such teams are characterized by resource heterogeneity (i.e., comprised of individuals with diverse and complementary skill sets). The RS strategy is inherently rational, as it is concerned with providing the entrepreneurial team with the necessary human capital to meet the goals of the new venture (Ucbasaran et al., 2003; Unger et al., 2011). In the early stages of team formation, a practical manifestation of this strategy implies an assessment of own knowledge and skills followed by a search for potential co-founders to fill the gaps and contribute to the economic output of the venture (Forbes et al., 2006). Following the instrumental logic of the RS strategy, teaming is beneficial when team members’ skill sets are diverse and complementary because the chances of success are greater. This suggestion prompts the following two hypotheses:
RS strategies have a positive effect on venture attraction.
RS strategies have a positive effect on co-founding attraction. Another strategy is the interpersonal attraction (IA) strategy, where the team formation process is driven by relationships with similar individuals in social networks (Forbes et al., 2006). Drawing upon a mechanism of homophily, the IA strategy asserts that individuals will likely form groups with people who share similar values, backgrounds, education, and other characteristics (Jin et al., 2017; Lazar et al., 2020). In practice, prospective entrepreneurs applying IA strategies might search for co-founders among strong ties in their close, immediate networks consisting of friends and family (Discua Cruz et al., 2013; Francis & Sandberg, 2000) or among weaker ties in professional networks (Davidsson & Honig, 2003; Mosey & Wright, 2007). Applying an IA strategy could be driven by a desire to maintain a certain ‘atmosphere’ or certain views in the team and venture. An assessment of skill complementarity does not necessarily accompany this search. IA strategy teams have their pros and cons. For instance, Francis and Sandberg (2000) found that friendship improves early team performance and efficiency. Representing faultline theory, Van Knippenberg & Schippers (2007) argue that homophily teams should function more smoothly, decreasing the number of personal conflicts that ultimately make them fall apart. Assessing team members’ interpersonal fit is a crucial element in early team formation (Kamm & Nurick, 1993), and the attraction toward potential team members could be a deciding factor in the decision to engage in venturing and teaming (Forbes et al., 2006). This prompts the following two hypotheses:
IA strategies have a positive effect on venture attraction.
IA strategies have a positive effect on co-founding attraction. Finally, it has been suggested that prospective entrepreneurs may employ a dual strategy approach to entrepreneurial team formation (Lazar et al., 2020; Shah et al., 2019). Using this dual strategy, prospective entrepreneurs simultaneously assess skill complementarity and interpersonal attraction. Entrepreneurs using dual strategies often look for complementary skills among close network ties (Shah et al., 2019). Such teams often comprise members with strong pre-existing personal relationships, e.g., childhood friends who have followed different educational paths. For young, prospective entrepreneurs, dual strategies might represent the least expected strategy, as one might not yet have strong personal ties with someone possessing complementary knowledge and skills, given one’s limited network (Clarysse et al., 2005; Mosey & Wright, 2007). Additionally, Lazar et al. (2021) argue that dual strategy teams are rare because aspiring entrepreneurs might not have the time and cognitive attention necessary to employ dual strategies. Instead, they prioritize interpersonal fits in entrepreneurial team formation because of increased trust and understanding within the team. However, the dual strategy teams formed are often more successful (Lazar et al., 2021; Shah et al., 2019) compared to single strategy teams. This is because complementary skills and trust, understanding, and familiarity are important in all critical phases of business venturing, such as initial funding, entry into incubators, product creation, etc. (Vohora et al., 2004). Thus, the combined RS and IA components of dual strategy teams present a ‘best of both worlds’ scenario, positively affecting the venturing and co-founding attraction:
Dual strategies have a positive effect on venture attraction.
Dual strategies have a positive effect on co-founding attraction.
Table 1 summarizes the hypothesized explanations of the team formation strategy and attraction relationship, moderated by entrepreneurship education.
Explanations of team formation strategy and attraction relationship, moderated by entrepreneurship education.
Moderating Effects of Entrepreneurship Education
EE is primarily concerned with addressing the nature of business entry and training of skills related to entrepreneurship, managing businesses, ideas, and nurturing entrepreneurial capabilities (Gartner et al., 1992; Solomon & Fernald, 1991; Tomy & Pardede, 2020; Winkel, 2013). Since the first entrepreneurship course at Harvard in 1947 (Katz, 2003), the world has seen a rapid increase in university-based EE programs (Morris et al., 2013; Nabi et al., 2017) as well as entire schools, departments, and colleges dedicated to entrepreneurship (Pittaway, 2021). However, despite the increasing supply of EE, the field is still in relative infancy in terms of research and practice (Fayolle, 2013; Karlsson & Nowell, 2021; Neck & Greene, 2011). Across the EE landscape, a multitude of pedagogical approaches are used, from traditional approaches of teaching ‘about’ entrepreneurship to more interactive, case-based approaches ‘for’ entrepreneurship (Lackéus, 2020; Moberg, 2014), ultimately taking an experiential approach to teaching ‘through’ entrepreneurship (Béchard & Gregoire, 2005; Hägg & Gabrielsson, 2020).
Most recently, the frontier of EE has taken an ‘experiential turn’ focusing on action learning, realistic and simulated business start-ups in venture creation programs (Hägg & Gabrielsson, 2020; Hägg & Kurczewska, 2020; Neck & Greene, 2011; Piperopoulos & Dimov, 2015; Rasmussen & Sørheim, 2006). Following this ‘experiential’ turn, team formation has started to enjoy renewed focus in EE research (e.g., Backs et al., 2019; Krawczyk-Bryłka et al., 2020; Pearlstein, 2020, 2021; Warhuus et al., 2021). Recent research points toward team formation being central to learning in the experiential classroom (Warhuus et al., 2021). In other words, if the experiences that students and teams get in the experiential classroom mimic real-life entrepreneurial processes, then chances of entrepreneurial learning are increased. Additionally, since learning can be understood as a social activity, where learning is supported and nurtured in student groups (Chen & Kuo, 2019; Deibel, 2005)
Despite entrepreneurship making a way for itself in universities and business schools worldwide, university students often do not consider entrepreneurship a viable career option (Tomy & Pardede, 2020). While engaging in entrepreneurship is conscious and voluntary (Liñán & Chen, 2009), universities are expected to encourage students to pursue entrepreneurship (Krueger et al., 2000) by providing a variety of programs and services (e.g., incubators, hubs, etc.) motivating students toward entrepreneurship. On average, students are more likely to enroll in EE and engage in learning opportunities if they intend to start businesses (Lee et al., 2018).
While all business students stand to gain some insights about venturing vis-à-vis their business education (Johannisson, 2016), most EE programs provide its students with specific training in team formation, opportunity recognition and -evaluation (Neck & Greene, 2011; Pazos et al., 2022). Accurately recognizing and evaluating business opportunities and entrepreneurial teams are central traits in taking entrepreneurial action (Healey et al., 2021). This should attract EE graduates to venturing when conditions are ‘optimal.’
While EE alone should promote higher levels of venture and co-founding attraction, little is known about how enrollment into EE impacts the team formation-attraction relationship. Usually, EE teams are based on principles of heterogeneity because such teams expose students to various ideas and perspectives (Johnson & Johnson, 1991), stimulating learning, creativity, and social development (Jarvis, 2011). Pearlstein (2020) suggests that students’ self-chosen teams are more homogenous than professor-chosen teams and less innovative and lower performing. However, team cohesion and performance can be increased through team formation exercises. Given that the instrumental rationalities of the RS strategies are expected to be the most dominantly employed strategy (Karlsson & Nowell, 2021) in EE and non-EE business education throughout, the increased awareness toward benefits of skill complementarity should lead EE graduates to be more attracted to venturing and co-founding compared to non-EE graduates. This prompts the following two hypotheses:
Enrollment in entrepreneurship programs positively moderates effects of RS strategy on venture attraction
Enrollment in entrepreneurship programs positively moderates effects of RS strategy on co-founding attraction EE enrollment could also moderate IA strategies’ effects on venture and co-founding attraction. EE often seeks to mimic real entrepreneurship., and as such, EE graduates are expected to exhibit traits somewhat similar to those of actual entrepreneurs, such as prioritizing familiarity and the trust of close relations (e.g., friends) in teaming (Ruef et al., 2003) and being biased toward homophily (Parker, 2009), because this decreases overall level of uncertainty and risk of failure (Shepherd, 2004). Additionally, EE graduates should be equipped with better skills for engaging in friendship-based entrepreneurial teams than non-EE graduates due to their extensive training in teamwork competencies. Such training can improve team performance, cohesion, and entrepreneurial drive (Brinckmann & Hoegl, 2011; Chen et al., 2017; Pearlstein, 2020). EE graduates are therefore expected to be more attracted toward engaging in friendship-based ventures compared to their non-EE-peers. Although the literature supports a hypothesis of positive moderation effects, it remains unclear to what extent students are also taught the pros of the IA strategy due to the presumed dominance of RS strategies (Karlsson & Nowell, 2021). Therefore, the existence of moderation effects is unclear. Nevertheless, the following hypotheses are proposed under the assumption that EE graduates are taught IA strategies.
Enrollment in entrepreneurship programs positively moderates effects of the IA strategy on venture attraction
Enrollment in entrepreneurship programs positively moderates effects of the IA strategy on co-founding attraction Finally, support for hypotheses H4A + B and H5A + B, EE indicate that EE should positively moderate the effects of dual strategies. Dual strategies constitute a best-of-both-worlds approach where prospective entrepreneurs seek to engage in entrepreneurial team formation with similar others possessing complementary skill sets (Lazar et al., 2020; Shah et al., 2019). In an EE context, students may have limited experience engaging in dual strategy teams due to the limited pool of potential team members and their skill sets. Although this lack of experience might reduce moderation effects, the EE graduates should have increased venturing and co-founding attraction in dual teams compared to their non-EE peers. The following two hypotheses are proposed:
Enrollment in entrepreneurship programs positively moderates effects of a dual strategy on venture attraction
Enrollment in entrepreneurship programs positively moderates effects of a dual strategy on co-founding attraction
Methodology
Experimental methods have shown promise for advancing entrepreneurship research (Williams & O’Reilly, 1998), but EE research has only seen limited use of such designs (Costa et al., 2021)
The vignette approach was chosen because it engages participants in situations that differ from their real life (Hsu et al., 2017) and consequently allows for testing attitudes toward team formation strategies before respondents engage in entrepreneurial teams. This addresses the potential self-selection of prospective entrepreneurs enrolling in EE or employing specific cognitive strategies to achieve entrepreneurial goals. It also addresses survivor bias (Agarwal, 2019), allowing the study of team formation for potential teams, not just those realized. Vignettes are also useful because they give the researcher control over the independent variables and their operationalizations (Aguinis & Bradley, 2014). Additionally, a successfully executed vignette study has the same causality benefits as field experiments while also overcoming the validity-related concerns of surveys, as respondents are likely not fully aware of manipulations (Mutz, 2011).
While strategies often are considered something individuals actively use, this present study ‘assigns’ a strategy to individuals to see how certain scenarios representing a specific team formation strategy affect venture and co-founding attraction. Respondents are presented with one of the following four vignettes that manipulate RS, IA, and dual strategies: [[A] A long-time friend/[B]An acquaintance] that you haven’t worked with before presents you with what you consider to be a highly interesting business opportunity with a huge potential and wants to partner up with you. You consider the risk relatively acceptable. Your [[A] long-time friend/ [B]acquaintance] has studied [[C]a similar type of education as you at another university and has the same knowledge and competencies for starting this business as you]/[[D] a very different type of education than you at another university and has different relevant knowledge and competencies for starting this business than you.]
Each of the four vignettes manipulates elements of the tested strategies [A] manipulates weaker interpersonal fit, while [B] manipulates stronger fits. [C] Represents skill similarity, and [D] skill complementarity. The dual strategy is found in the combination of strong interpersonal fit [B] and skill complementarity [D].
Assignment of vignettes using birth month.
Balancing check using t-test for groups I-IV. Mean values and standard deviations.
Note: **p < 0.05, ***p < 0.01.
aGender is coded male = 1, female = 0.
bLabor market experience in years.
cWestern nationality = European, North American, Australian, and New Zealand nationalities.
dOther nationality = South and Central American, African, Asian, and South Pacific nationalities.
eEnrollment in EE = Enrollment in Entrepreneurship Education.
fESE = Entrepreneurial Self-Efficacy.
Sample
Data comprised survey answers from recent graduates from a large Scandinavian metropolitan business school. Following graduation in the fall of 2020, a survey was distributed to graduates on all programs from classes of 2017–2019. The response rate was 30.1%, resulting in a sample of 1,713 full responses.
The studied business school offers a variety of programs, including entrepreneurship, general management, law, international politics, accounting, finance, strategy and leadership, digitalization, and human resource management. Regarding respondent demographics, 10.4% of respondents graduated from an entrepreneurship program, 48.4% were male, and the mean graduation age was 28.3 years. Moreover, 77.3% of the sample are native citizens, 20.4% have a western nationality, and 2.2% have another nationality. Regarding representativity, the sample does not deviate statistically significantly on EE enrollment, gender, or age (p > .05) from the graduate population. Unfortunately, information on non-respondents’ nationality was not available.
Dependent Variables
Upon presentation of the vignette, respondents assessed venture attraction and co-founding attraction on two self-developed single-item measures. While multi-item scales for measuring the attractiveness of a business exist (Davidsson et al., 2021; Gregoire et al., 2010), a single-item approach was chosen. This is in line with both previous vignette studies (Hainmueller et al., 2015; Wallander, 2009) and studies alluding to the intent and attractiveness of entrepreneurship (e.g., Thompson (2009) who reviewed 10 of 26 studies to make use of single-item measures). Respondents answered the extent to which they agreed with the following statements: A) Starting this business is an attractive idea to me, and B) I find it desirable to partner up with this person for starting this business. A 5-point Likert scale was used. Options of either skipping the question or choosing ‘Don’t know’ were included in case respondents found the scenario too abstract. Across all groups, 62.3% found the business idea attractive, while 61.2% were attracted to co-founding. The two dependent variables are standardized in the analysis, allowing for comparing effect sizes across models.
Independent Variables
Effects of team formation strategies were manipulated using three dummy variables, each pertaining to a specific strategy. Additionally, an indicator variable of enrollment in an entrepreneurship program is included. Six of 39 programs (15.4%) are entrepreneurship programs, accounting for 10.4% of respondents. These programs cover bio-entrepreneurship, digital entrepreneurship, entrepreneurship within creative businesses, and general innovation and entrepreneurship, all applying experiential and traditional pedagogies.
Control Variables
Analyses included controls for socio-demographic characteristics such as gender, nationality, and age, as these are influential in both entrepreneurship and education; for example, in business networks, men more often socialize with other men, whereas women socialize with both men and women (Hellerstedt, 2009). Other studies found that nationality and ethnicity affected team success (e.g., Kim & Aldrich, 2004), and age has proven important in predicting entrepreneurial behavior (Azoulay et al., 2018). The survey covers graduates from 2017 through 2019, meaning potential differences in individual labor market experience exist. This is controlled for by including a variable for individual experience in years. Finally, a measure of entrepreneurial self-efficacy (ESE) developed by Zhao et al. (2005) is included in the analyses. ESE measures belief in one’s entrepreneurial abilities. A recent review by Newman et al. (2019) shows that ESE affects career choice, entrepreneurial behavior, and performance. As such, failing to account for the confounding effects of ESE in estimating effects of team formation strategies could lead to biased results. The four items of the ESE measure are compiled into a single scale ranging from 0, i.e., no ESE, to 1, i.e., maximum ESE. In practice, this allows for easier interpretation of the regression coefficients. Once applied to the data, the ESE measure shows good internal consistency (Cronbach’s alpha = .80) and is normally distributed across responses (mean = .73, SD = .18).
Results
Summary statistics and correlations matrix.
Note: **p < .05, ***p < .01.
aGender is coded male = 1, female = 0.
bLabor market experience in years.
cWestern nationality = European, North American, Australian, and New Zealand nationalities.
dOther nationality = South and Central American, African, Asian, and South Pacific nationalities.
eEnrollment in EE = Enrollment in Entrepreneurship Education.
fESE = Entrepreneurial Self-Efficacy.
Results of Team Formation Strategies
Hierarchical regression results, entrepreneurial team formation strategies on venture and co-founding attraction.
Note: ***p < 0.01, **p < 0.05, *p < 0.1 Standard errors in parentheses. Venture attraction and co-founding attraction are standardized. Native graduates are the reference group.
aGender is coded male = 1, female = 0.
bLabor market experience in years.
cWestern nationality = European, North American, Australian, and New Zealand nationalities.
dOther nationality = South and Central American, African, Asian, and South Pacific nationalities.
eESE = Entrepreneurial Self-Efficacy.
Across all models showing significant effects (M2, M4, M6, M8), standardized effects were generally higher on co-founding attraction than venture attraction. Comparing effect sizes in models containing RS and dual strategies yields the conclusion that RS strategies have the largest effects. In this sense, RS strategies are most instrumental in increasing venture and co-founding attraction.
Results of Enrollment in Entrepreneurship Education
Linear regression models, entrepreneurial team formation strategies, and enrollment in entrepreneurship programs on venture and co-founding attraction.
Note: ***p < 0.01, **p < 0.05, *p < 0.1 Standard errors in parentheses. Venture attraction and co-founding attraction are standardized. Native graduates are the reference group.
aGender is coded male = 1, female = 0.
bLabor market experience in years.
cWestern nationality = European, North American, Australian, and New Zealand nationalities.
dOther nationality = South and Central American, African, Asian, and South Pacific nationalities.
eESE = Entrepreneurial Self-Efficacy.
fEnrollment in EE = Enrollment in Entrepreneurship Education.
Influence of enrollment in EE on the effects of resource seeking, interpersonal attraction, and dual strategies and the two dependent variables.
Results (figure 1, A) support H4A, showing that EE positively moderates the relationship between RS and venture attraction (b = .329, p < 0.1), indicating that EE increases venturing attraction significantly for EE graduates prompted with an RS strategy compared to non-EE graduates. Similarly, results support H4B (figure 1, (b)), showing that EE positively moderates the relationship between RS and co-founding (b = .451, p < .01). However, results show no moderating effects of enrollment in EE on the relationship between IA strategies and either outcome measure (figure 1, (c) and (d)), ultimately leading to a rejection of both H5A and H5B.
Finally, results regarding moderation effects of EE on the effects of dual strategies are mixed. Results show that while main effects of dual strategies lead to higher levels of venture attraction on average (b = .133, p < .05), this relationship is not significantly moderated by EE (figure 1, (e)). As a result, H6A is rejected. Similarly, results show significant main effects of a dual strategy on co-founding attraction (b = .191, p < .01), but moderation effects (figure 1, (f)) are only significant at the 10% level (b = .329, p < .10). The statistical uncertainty of these results ultimately leads to a rejection of H6B.
Overview of support for hypotheses.
Discussion
This study offers several new insights into the relationship between team formation strategies and attraction toward venturing and co-founding, in and out of EE. First, studying venturing and co-founding attraction provides a unique perspective on the first steps of entrepreneurial action by examining prospective entrepreneurs rather than actual entrepreneurs and their teams (e.g., Lazar et al., 2021). This approach attempts to deal with the potential survivor bias that retrospective studies may suffer from (Agarwal, 2019). The positive association between resource seeking team formation and attraction toward venturing and co-founding is consistent with the literature on the effects of skill diversity in entrepreneurial teams (Jin et al., 2017; Lazar et al., 2021; Shah et al., 2019; Ucbasaran et al., 2003). Additionally, the present study extends the literature by showing how the outlook of a team’s combined set of skills impacts attraction toward entrepreneurship already in the pre-founding phase (e.g., Knipfer et al., 2018).
The lack of significant results of IA strategies on venturing and co-founding attraction is surprising, as it contradicts research on similarity/attraction and homophily in entrepreneurial team formation (e.g., Ruef et al., 2003). These divergent findings have two plausible explanations, (1) friendship and homophily as a basis for selecting co-founders are inferior to the filling of gaps associated with RS strategies in the pre-founding phase (Francis & Sandberg, 2000; Karlsson & Nowell, 2021), or (2) the experimental manipulation of IA was too weak to establish significant effects.
This study nuance the findings by Lazar et al. (2021), who stipulate that dual strategy teams are superior to single-strategy teams in terms of performance. The present study shows that prospective entrepreneurs are more attracted toward venturing when prompted with single strategy scenarios. This finding might be partly explained by dual strategy teams being difficult to enact (Lazar et, 2021). Alternatively, suppression mediation cannot be completely ruled out, with effects of a dual strategy reflecting only RS components. Future studies should examine how various individual and contextual factors affect attraction toward venturing in dual strategy teams.
Second, this study explores the role of EE in entrepreneurial team formation. The introduction of EE as a moderator for the team formation strategy-attraction relationship is novel to the authors’ knowledge. Teamwork competencies are essential in the venture-creation process’s early stage (Harms, 2015; Knipfer et al., 2018). Thus, training in teamwork competencies should be a core part of EE (Lackéus, 2020; Neck & Greene, 2011; Pazos et al., 2022). This study finds that EE moderates the team formation strategy-attraction relationship differently, contingent on strategy. EE graduates exhibit higher levels of venturing and co-founding attraction under the RS strategy condition than non-EE graduates, but with no differences under the IA condition. The increased attraction of EE graduates under the RS condition could partly be explained by EE’s emphasis on opportunity recognition and evaluation skills (DeTienne & Chandler, 2004; Neck & Greene, 2011; Saks & Gaglio, 2002). Most recently, Healey et al. (2021) showed that team formation strategies shape how entrepreneurs evaluate opportunities, highlighting that prospective entrepreneurs apply RS strategies after learning about business opportunities, contrary to employing IA strategies before learning about such opportunities. The present study supports these findings by contrasting entrepreneurship graduates’ level of venturing and co-founding attraction to non-entrepreneurship graduates under the RS strategy condition, showing that EE matters significantly.
Contrary to the findings of Healey et al. (2021), the results in this work show no evidence of a relationship between EE and venturing attraction under the IA condition. One potential explanation for this is the presumed dominance of an RS mindset in the literature (Forbes et al., 2006) and in EE (Karlsson & Nowell, 2021). Entrepreneurship graduates were hypothesized to be better at recognizing how interpersonal fits can increase chances of entrepreneurial team success through familiarity with one another, trust, reduced conflict and turnover (e.g., Harrison & Klein, 2007; Ruef et al., 2003; Williams & O’Reilly, 1998). However, results do not indicate that EE graduates apply this knowledge when assessing venturing or co-founding attraction. If EE does not properly address and teach the pros of applying IA strategies in entrepreneurial team formation processes. In that case, chances are lower that graduates will apply IA or dual strategies post-graduation. Failing to consider interpersonal fits could result in more low-performing entrepreneurial teams. These findings have implications for teaching team formation strategies in EE.
Implications for Entrepreneurship Education
Noting the dissonance between EE graduates’ attraction toward venturing and co-founding under the RS condition and the superior performance of dual strategy teams, as shown by Lazar et al. (2021), arguments can be made for a research-practice gap. Therefore, EE could benefit from taking a renewed interest in teaching students to combine RS and IA strategies. Ideally, this could lead to more actual dual strategy teams being formed, increasing EE graduates’ chances of entrepreneurial success.
The findings of this study suggest that EE should support teaching team formation strategies and exercises early and throughout programs, as team formation strategies matter already in the pre-founding phase. Especially considering that team formation skills can be taught through exercises (Morland et al., 2021). Furthermore, given the extent of EE programs with experiential and team-oriented elements (Mandel & Noyes, 2016), entrepreneurship educators could readily seek to implement successful team formation exercises in their teaching (e.g., Arpiainen & Kurczewska, 2017; Pazos et al., 2022; Pearlstein, 2020; 2021).
Limitations and Further Research
This study is not without limitations. First, the present study does not include subsequent measures of entrepreneurial success. This would require investigating actual teams – rather than hypothetical ones. Including such measures could explain how team formation strategies affect the venturing process in different phases of the business life cycle.
A second limitation pertains to the insignificant effects of IA strategies. As previously argued, the manipulation of IA may not be sufficiently strong. Invoking a feeling of attraction toward a generalized ‘friend’ or ‘acquaintance’ from a vignette is difficult. Future research could extend the findings of this study by including more extensive validated measures of interpersonal attraction and homophily (e.g., McCroskey et al., 2006). Such measures could be very well suited for vignette and conjoint experiments. Additionally, including state-of-the-art measures such as the Venture Idea Assessment (Davidsson et al., 2021) or the opportunity evaluation measure by Scheaf et al. (2020) to capture entrepreneurial capabilities of both EE and non-EE-graduates could yield deeper insights into the effects of team formation strategies on decision-making and the role of EE in this regard.
Third, concerning the experimental design of this study, team formation strategies were assigned conditionally on respondents’ birth month. While highly unlikely, possible correlations between assignment conditions, team formation strategies, and outcome variables cannot be ruled out. This would require a fully randomized design. ANOVA and t-tests reveal vignette distribution to be balanced (Table 3), and analyses included inverse probability weights to account for bias on unobservable characteristics.
Finally, future studies should include additional variables to consider the relationship between idiosyncrasies previously shown to impact entrepreneurial outcomes, such as past experiences, risk aversion, emotions, gender, or personality traits (Shepherd et al., 2021) and preferences in team formation strategies. Additionally, such studies could introduce psychological variables such as values, norms, beliefs, and value consensus (Jehn, 1994; Karlsson & Nowell, 2021) to investigate their impact on the team formation strategy, attraction and performance relationship.
Despite these limitations, the present study brings insights into team formation in EE. The author hopes the study’s findings inspire educators to emphasize team formation when teaching entrepreneurship and researchers to investigate the relationship between gender, risk-aversion, prior founding experiences, industry, product/service/technology, and preferences in entrepreneurial team formation. Such studies on EE’s effects should also include non-EE students to contrast and contextualize findings.
Conclusion
The present study examines how entrepreneurial team formation strategies influence the attraction toward starting a business or co-founding. Moreover, the study examines how this relationship is moderated by entrepreneurship education. A quasi-experimental design was employed using vignettes on a large sample of prospective entrepreneurs, namely entrepreneurship and business school graduates. The study showed that certain team formation strategies increase attraction towards venturing and co-founding. Entrepreneurship education moderated effects of resource seeking team formation strategy. Moreover, results were discussed concerning entrepreneurship education with implications for how team formation strategies are taught. Finally, future avenues that can inspire entrepreneurship education and team formation research are discussed. The author hopes that the results encourage entrepreneurship educators to emphasize team formation strategies in their teachings, increasing prospective entrepreneurs’ chances of engaging in successful entrepreneurial teams.
Footnotes
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by The Independent Research Fund Denmark [Grant Number 8108-00031B].
