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New research: growth intentions in family-based new venture teams

Business success, especially for entrepreneurs who are just starting out, is often measured in terms of new venture growth. Unfortunately, this kind of growth can be hard to achieve for entrepreneurs who don’t have access to many resources.

As a result, new nascent entrepreneurs tend to favor forming new venture teams (NVT) to access the resources that they need. An NVT consists of two or more people who are involved in activities pre-start-up and share ownership of their organization. Most research into NVTs focuses on those comprised of unrelated individuals. Yet, the majority of NVTs are comprised of family members.

New research from the House of Innovation focuses on the extent to which family ties in NVTs drive growth intentions of nascent entrepreneurs. It finds that the presence of family ties in an NVT negative affects the nascent entrepreneur’s growth intentions. This analysis contributes to existing literature in this area by recognizing that a family firm will typically prioritize maintaining control and influence over purely financial objectives. The results of this study are consistent with previous research about the family dilemma in the decision-making process indicating that some family firms might be reluctant to diversity or acquire other companies. Essentially, if an NVT is made of people who aren’t family, then they are more likely to prioritize purely financial goals.

This means that to know what drives entrepreneurship and growth intentions among NVT, entrepreneurs, policy-makers, educators and scholars need to understand the ties between the individuals forming the NVT, and the underlying financial and non-financial goals that drives these individuals.

Researchers

Fernando Muñoz-Bullón
Department of Business Administration, Universidad Carlos III de Madrid

Maria J. Sanchez-Bueno
Department of Business Administration, Universidad Carlos III de Madrid

Mattias Nordqvist
House of Innovation, Stockholm School of Economics

House of Innovation Entrepreneurship Finance Start-up Strategy Economics Article Journal Publication Research