A Determinant of Entrepreneurial
Team Venture Success
Small Business Economics
16: 263–278, 2001.
2001 Kluwer Academic Publishers. Printed in the Netherlands.
ABSTRACT. An important issue to explain the success of
new ventures is mostly ignored by the research of entrepre-
neurship: the social interaction within entrepreneurial teams.
The purpose of this paper is to introduce the concept of social
interaction, which was originally developed for innovation
teams in the field of entrepreneurship research and theory.
The theoretical discussion proves if an adoption of the
social interaction to the field of entrepreneurship is theoreti-
cally possible. Using the data of 159 German entrepreneurial
teams, the effects of social interaction on new business success
are empirically proven. The introduced measurement model,
which consists of six dimensions, shows a high quality in the
empirical test. The quality of the social interaction within
entrepreneurial teams is crucial for the new venture success.
An empirical comparison with the frequently used team
conflicts confirm that the measurement of conflicts is not a
sufficient substitute measurement for social interaction.
Overall, the social interaction in entrepreneurial teams could
be seen as an important but not only factor of business success.
People who are founding and developing new
ventures are confronted with a great variety of
challenges deriving mainly from business and
technological uncertainty. In this context entre-
preneurs have to solve technological, managerial,
jurist as well as human related problems.
Moreover, the transformation of an idea into
saleable products can take years and requires
financial resources and leadership in business and
technology. Existing theoretical and empirical
studies reflect the great variety of influences on
entrepreneurial success. Despite the magnitude of
research on new ventures and small businesses,
researchers still cannot explain theoretically the
growth of firms adequately (Tuck and Hamilton,
1993). As the entrepreneur is the focus and plays
a key role in the firm’s activities, various studies
analyse the characteristics and behaviours of these
key people. However, most of these studies see the
entrepreneur as a single person. This traditional
view is strikingly paraphrased by Cooney and
Bygrave (1997): “For a long time it has been a
great myth that entrepreneurship implicitly
describes the battle of a lonely hero against
economic, governmental and social forces.”
In contrast to these research efforts, multiple
entrepreneurs have been well documented since
the beginning of the industrial revolution. For
example, Werner von Siemens and Georg Halske
founded in 1847 the Siemens AG of today, and in
1863, Dr. Eugen Lucius, Carl Meister and Ludwig
M¸ller founded the Hoechst AG, demonstrating
impressively that even at the beginning of the 20th
century entrepreneurial teams could be very suc-
cessful. Analysing the industry, entrepreneurial
teams appear to be more common than the
entrepreneurship literature suggests (Cooper,
1986; Teach et al., 1986; Vyakarnam et al., 1997).
Hunsdiek (1987) reports for Germany a median of
2.2 entrepreneurs per new high-tech venture.
Based on a sample of 340 very promising East
German new high-tech ventures which get
substantial financial support from the German
government, Pleschak and Werner (1998) report
that 68% of these firms are founded by two or
more persons. Cooper et al. (1990) cite a study of
2994 entrepreneurs and members of the National
Federation of Independent Business who reported
that they had only 30% full-time partners at the
time of start-up. Entrepreneurial teams are a part
of the economic reality.
The variation of occurrence rates of venture
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