In this conceptual work we introduce an explicit, yet basic, analytical framework emphasizing individual knowledge differences in budding entrepreneurs. Here, entrepreneurial activity is characterized by specializedknowledge resources coming together in entrepreneurial teams for startup activity. One can think of such underlying specialized knowledge as having been created and advanced through the division of labor, and call this process the division of knowledge. The basic model predicts that oftentimes entrepreneurial teams will fail to come together due to the very differences in specialized knowledge necessary for entrepreneurial discovery. A lack of confidencebetween potential team members, in each other, with respect to their specialized knowledge is shown explicitly to cause a breakdown in startup team formation.