Abstract

With whom should entrepreneurs create their firms in order to enhance nascent venture performance? Conventional wisdom suggests that the stronger human capital and social relations in nascent venture teams are, the better the nascent venture’s performance. We draw from social embeddedness literature, however, and argue that the positive effect of team members’ human capital on nascent venture performance is weaker when team members exhibit strong social relations. Our analysis of 488 nascent venture teams in the PSED II dataset confirms our predictions. The study thus offers valuable contributions particularly to literature on entrepreneurial teams and on the determinants of new venture performance.

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