The Founding Team: Identity, Conflict, and the Power of Fit

Dean A. Shepherd () and Holger Patzelt ()
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Dean A. Shepherd: University of Notre Dame, Mendoza College of Business
Holger Patzelt: Technical University of Munich, School of Management

Chapter 6 in The Entrepreneurial Compass, 2026, pp 41-49 from Springer

Abstract: Abstract This chapter frames the founding team as a collective engine essential for overcoming the liability of newness. Teams satisfy the fundamental human need for belonging and provide diverse knowledge to solve complex problems. The authors contrast two compositional archetypes: teams of specialists (complementary expertise) and teams of generalists (broad but overlapping knowledge), noting the “generalist penalty” in fundraising. A high-functioning team develops a transactive memory system—a shared understanding of who knows what—to coordinate labor and improve entrepreneurial orientation. Social dynamics like the contagion of effort, task vs. relationship conflict, and group rule-breaking are analyzed. A critical “nuclear issue” is perceived justice in the distribution of equity, which determines whether a team enters a positive or negative interaction spiral. The authors also identify an optimal ownership range for maximizing team identification. Finally, the chapter discusses culture creation, managing faultlines, and using shielding to protect the venture from external partner interference.

Keywords: Cognitive Diversity; Equity Distribution; Founding Team; Liability of Newness; Task Conflict; Transactive Memory System; Venture Culture (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-36429-6_6

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DOI: 10.1007/978-3-032-36429-6_6

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