SI seminar with Elisabeth Müller

When starting a firm, founders need to decide about the ownership distribution. The ownership distribution represents the owners’ preferences for social interactions. Applying social relations theory, we hypothesize that founding teams that chose an unequal equity distribution are more likely to accept new team members, that teams with unequal equity distribution show higher performance, and that team entry positively mediates the equity split – performance relationship. Based on annual observations of the near population of new ventures in knowledge-intensive industries in Germany for the years 1999-2007 we find empirical evidence which is consistent with our hypotheses. We contribute to the entrepreneurship literature by showing that founder teams can be usefully categorized into two categories according to whether they prefer an unequal or equal equity split. The initial equity split influences the future performance of the new ventures.

The seminar will take place in Kilen, room 1.50.