Mentors benefit entrepreneurs by lending them expertise and access to rewards such as capital, contacts, etc. (Ozgen & Baron, 2007; Davidsson & Honig, 2003). In this paper, we use a creativity lens to explore how mentors who are also investors influence startup performance. Given startup teams’ attraction to mentor-investor rewards and mentor-investors’ need of control to manage risks, self-determination theory (Deci & Ryan, 1985) suggests mentor-investors may stifle entrepreneurial creativity increasing the likelihood of venture failure. In contrast, the learned industriousness theory (Eisenberger, 1992) suggests that rewards signal the importance of creativity, which guides individuals’ behavior towards goals.

We suggest that choice control moderates the relationship between rewards and startup creativity. Choice control refers to aspects of the reward or context that offer or limit choice (Byron and Khazanchi, 2012). To generate creative ideas, startup teams must explore diverse alternatives (Amabile, 1996). Given choice, startups need to coordinate their team members’ collaboration (Harrison & Rouse, 2013; Hackman, 1987). Coordination refers to the “temporary unfolding and contextualized process of input regulation and interaction articulation to realize a collective performance” (Faraj & Xiao, 2006: 1157). We propose that rewards convey information that helps startup teams coordinate their creative collaboration.