Abstract

Drawing on a longitudinal multiple case study approach and data on eight entrepreneurial teams this article develops a dynamic model of the consequences of equity distribution among team members. Perceived justice of equity distribution emerged as a key variable influencing entrepreneurial team interactions. High perceived justice triggered positive team interaction spirals, whereas low perceived justice triggered negative interaction spirals. Teams exposed to external erosive stressors drifted from a positive spiral to a negative spiral despite high perceived justice. These spirals impacted important entrepreneurial outcomes. We discuss the implications of our study for research on entrepreneurial imprinting, justice, and exit.

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