Abstract

We utilize small groups literature and status characteristics theory to explain the effectiveness of entrepreneurial startup teams. We hypothesized that teams containing members with high status characteristics, such as prior entrepreneurial experience, will have higher levels functioning because these individuals are better able to provide contributions unavailable to lower status individuals. Further, we hypothesized that teams with status diversity will be associated with lower levels of functioning because diversity will reduce collective efficacy, the belief in the team’s ability to start a business (Bray, 2004). We tested our hypotheses using data from the PSED I and II, nationally representative samples of nascent entrepreneurs. We found that the presence of high achieved status characteristics led to an increase in access to important contributions within teams, but did not significantly increase the helpfulness of team members. We did not find consistent evidence that status diversity decreased team functioning. We found preliminary indications that role differentiation and authority structures, measures only available in the PSED II, provided important insight into how status characteristics affect group processes.

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