New venture team stability and long‐run organizational growth
Jerry Guo et al.
Abstract
Research Summary We explore the impact of new venture team (NVT) stability on long‐run organizational growth. With an instrumental variable design, we leverage a matched employer‐employee dataset of all Danish new ventures from 1981 to 1997. We find strong evidence that NVT stability has a positive effect on organizational growth in employees and that the effect grows stronger over time. We also find that stability is especially impactful for larger teams and for teams with higher education levels. The gains from stability also appear to be driven entirely by mixed‐gender teams. We connect our findings to the literature on NVT dynamics and suggest avenues for future research. Managerial Summary Stability within founding teams is crucial for the longevity and expansion of new ventures. We examine a dataset of Danish startups and find that ventures with stable founding teams demonstrate a 16.1 percentage point higher likelihood of survival and a 20.4% increase in average size after 10 years. This effect is accentuated in larger, more educated, and gender‐diverse teams. For entrepreneurs, these insights underscore the importance of not only assembling a strong initial team but also maintaining its composition to leverage growth opportunities as the business evolves.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.50 × 0.4 = 0.20 |
| M · momentum | 0.50 × 0.15 = 0.07 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.