Developing relational capital in team-based new ventures

This dissertation develops and tests a theory of how entrepreneurial teams develop relational capital—or relationships characterized by trust, identification, and obligations—and the impact of this relational capital on the teams' performance. I begin by identifying the challenges to relational capital development posed by the lack of social structure in the new venture context. Study 1 is a longitudinal qualitative, study of relationships in entrepreneurial teams in new technology ventures. Findings suggest that teams in which members cared about each other and cared about preserving the relationship were characterized by higher-quality relationships than team that did not exhibit such caring. However, the findings also suggested that caring was not enough. Teams that supplemented caring with systematic communication practices that increased explicitness and transparency about goals and actions were better able to preserve the quality of their relationships in light of the challenges they faced as a new venture. Based on the findings of this qualitative study and building on research on inter-personal and inter-organizational relationships, I develop a theoretical framework for relational capital development and the impact of relational capital on performance. Specifically, I argue that the combination of communal relational schemas—caring about team members' needs—and contracting practices—the process of making expectations explicit and transparent—enable entrepreneurial teams to develop trust, identification, and obligations. These forms of relational capital are hypothesized to increase creativity, resilience, and coordination in entrepreneurial teams. I test my hypotheses with a mail survey of high-technology entrepreneurial teams. The findings suggest that communal relational schemas and contracting practices both are positively associated with trust and obligations on the team and have no relationship with identification with the team. Trust and obligations were also found to be positively associated with creativity, resilience and coordination. Trust and obligations partially mediated the relationships between communal relational schemas and contracting practices on creativity, resilience, and coordination. The two studies in the dissertation contribute to the entrepreneurship literature by offering the apparently paradoxical combination of communal schemas and contracting practices as a means through which entrepreneurs can overcome the unique challenges associated with the new venture context.