Entrepreneurial Team Composition and Strategic Choice: A Configurational Analysis

The composition of entrepreneurial teams has a significant impact on the success and development of new ventures. We enrich the discussion on the benefits of homogeneity or diversity in entrepreneurial teams. Using data from PSED II, we investigate the relationship between new venture team (NVT) composition and performance. By identifying six distinct team configurations, we demonstrate that teams need a certain degree of homogeneity, but if a certain threshold is satisfied, heterogeneity can be an advantage. The combination of high team cohesion and a deep and broad stock of experience is a superior configuration, as well as homogeneous teams that are highly educated. We further contribute to a better understanding of start-up strategies and time-to-market by developing new insights in the trade-off between homogeneity and heterogeneity.