Main conclusions

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increasingly recognised that the formation of new ventures is commonly accomplished by teams as opposed to lone entrepreneurs” (p.226). Thus, recent research has focused on formation and composition to study teams’ processes and outcomes. Yet, further investigation of team formation and composition during the nascent stages of the business life cycle is necessary to better understand behaviours during starting a business (Klotz et al., 2014). Therefore, this thesis investigates links between NET composition and success by applying the theoretical principles of homophily and its counterparts, the rational process models and cognitive resource perspective (Byrne, 1971; Horwitz, 2005; Aldrich and Kim, 2007; Vogel et al., 2014). There was a need to conduct exploratory assessments due to limited conceptual and empirical work on the topic of nascent entrepreneurial teams. The exploratory analysis also made it possible to extend the current findings by considering what Steffens et al. (2012) call a constellation of variables in NET composition. In addition, the thesis explored multiple dimensions of the dependent variable to better capture the nuances and complexity associated with nascent entrepreneurial success.

To understand NET composition as a whole, it was necessary to first clarify the team compositional dimensions as separate entities. The simple or individualised consideration of NET compositional structures supported the theoretical perspective that suggests people ‘match’ their characteristics with others when joining a team to explore the opportunities of starting a new business. While the over-representation of teams with gender and resource diversity can be explained by the rational process model which supports the rationale for entrepreneurs starting teams with those different to themselves, hence, benefiting from a broad range of talents and resources. The existence of homogeneous team compositions in terms of age, ethnicity, HC, and familiarity, is explained by homophily principles.

The research presented in this thesis also extended its scope from a narrow view often taken in existing team research (where each individual team compositional dimension is studied to make generalised claims around cause and effects of team compositions) to analyse the potential associations and differences between the compositional constructs. To do so, this thesis assumed a typological approach by contemplating the four dimensions of NET composition simultaneously. One of the most striking findings from

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this approach is that a NET possesses both homogeneous and heterogeneous characteristics. This indicates that team members are looking for others who can complement their weaknesses while, at the same time, they need to feel certain degree of trust due to share similarities in other respects. This suggests that members whose decision to enter team-based venture is governed by a combination of factors.

Consideration of three dimensions of success suggests that different NET compositions have differential effects on the three milestones considered. For instance, when making the first sale is considered as success indicator, the study shows that heterogeneous compositions in gender and resources and homogeneous compositions in education and ethnicity are more likely to achieve the first milestone. In contrast, NET composition as predictor of success did not offer a strong explanation for making a surplus in revenues that cover the business expenses. However, the composition of the team does have an effect on whether or not the team is able to make profits from their business (profitability type II). In such a case, the study showed that heterogeneous compositions in age and teams formed by family, friends and colleagues are more likely to achieve profitability type II as success indicator.

This thesis also offers a more holistic understanding of the effect of NET composition on success by studying NET profiles. The findings suggest that, when the NET is configured by members who are family, friends and colleagues, are gender-homogeneous, possess different experience and knowledge, and financial assistance; they are more likely to found a profitable business. This indicates that teams with a profile that matches the one described are more likely to make a profit as they take advantage of contrasting ways of thinking (Vogel et al., 2014) and operational synergies (Wright and McMahan, 2011), while at the same time are able to build a trusting environment (Kim and Aldrich, 2006) with high levels of empathy and sympathy (D'hont et al., 2016).

Overall, this thesis identified the predominant structures or compositions of NETs which are shown to remain stable at least during the first five years. This thesis also identified how different compositional dimensions work in combination including defining two main types of NET profiles largely divided based on their physical proximity but containing homogeneous and heterogeneous characteristics. In terms of identifying the composition relevance to outcomes, this thesis concludes that to achieve different types

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of milestones the relevance of composition varies. In the first sale, composition matters in such a way that ethnic-homogeneous, education-homogeneous, gender-heterogeneous and resource heterogeneous teams provide favourable conditions for the team to achieve this success indicator. For the second milestone, however, because it is a step-up from achieving the first sale, none of the compositions constructs are significant. Nevertheless, when the team is trying to make money to cover expenses and salaries, the composition again provides some explanations as different arrangements (age-heterogeneous and ‘others’) promote this outcome.

Interestingly, some controls provide a clear explanation for the business to formally start operations by making their first sale while another has a clear explanation for teams starting to generate profit. To make the first sale, two controls are relevant: the time taken for entrepreneurs to invest in the business, and the difference between necessity and opportunity-based entrepreneurship. The first control suggests that team members’ passion, interest and perseverance provide a strong explanation in relation to making the first sale (Alstete, 2008). The second control indicates that teams who are motivated by both, necessity and opportunity, are more prone to make their first sale as some members are pushing to get the outputs out of the nascent business (necessity), while the other entrepreneurs are trying to make things work according to the business idea (opportunity) (Bhave, 1994). To generate profits that covers the expenses and the owners’ salaries, one control is relevant: the industry in which the venture operates. Teams initiating activities in a manufacturing industry are in a more favourable position to make the first sale and make profits out of the business for their personal benefit as this type of industry even though they face more barriers entries, they are more likely to require unique capabilities compared to trading industries (Cooper et al., 1994).

Lastly, in relation to the study of NET profiles, this study analysed the relationship between the two configurations and achieving high nascent entrepreneurial progress (i.e. achieving the three milestones during the five-year period of the study). By doing so, this thesis concluded that NETs which are diverse and formed by family friends and colleagues have more opportunities to make money for the team and generate profit from the nascent business in comparison to configurations largely composed by copreneurs with homogeneous characteristics. According to the findings, it was possible to conclude

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that it is neither a heterogeneous nor a homogeneous composition that positively affect nascent entrepreneurial success, but the correct composition of individual attributes that matters (Horwitz, 2005).