A Process Study of Entrepreneurial Team Formation : The Case of a Research-Based Spin-Off

This study explores how the team managing a start-up evolves and copes with and learns from crises during the start-up phase. Shocks in the founding team and the position of its champion co-exist with shocks in the development of the business. The research is a case study of CINE, a pseudonym for the spin-off, technology transfer company owned by the Université Catholique de Louvain la Neuve, the largest French-speaking university in Belgium. The longitudinal approach was adopted alongside business history approaches; the tracing of historic company documents and project data is central, and is often complemented with extensive interviews about the company's history and current options. Members of the management team were observed and interviewed during 2000 and 2001. It is observed that, in practice, the "champion" of a venture automatically evolves into the CEO position. The role of the coach is explored, as the coach is the intermediary person between the financial investor and the entrepreneurial team, translating business expectations of the investor into strategic choices. The findings also suggest the difficulties of a large start-up team; entrepreneurial start-up teams that are larger than four persons may be hard to run in practice. Four major implications of the investigation are presented: (1) it may seem that obtaining a start-up team with previous experience may be the most attractive option, but if this can only be accomplished by hiring external business people, it can become a disadvantage; (2) the champion of a business idea is seldom the best manager but often the most immediate solution to manage the team at start; (3) entrepreneurs that come out of a research environment only gradually learn how to adapt their ideas to business needs; (4) a gradual investment through various capital increases may be better than a large investment at start. Only after members of the team accept their strengths and weaknesses and agree with the structure, is the company is ready for a venture capital injection.(CBS)