#4725. The heavy cost of kumbaya–understanding the survival implications of nascent venture ownership structure

August 2026publication date
Proposal available till 24-05-2025
4 total number of authors per manuscript0 $

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Journal’s subject area:
Business, Management and Accounting (miscellaneous);
Strategy and Management;
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Abstract:
This paper brings in relevant entrepreneurial behaviour theory to understand the ownership decisions founders make during the nascent stage of new venture creation, and how such decisions impact the viability of the firm. The authors examine the behaviour and decision making of 137 lead founders during the nascent stage of new venture creation. Psychological ownership and environmental uncertainty are measured of lead founders when dividing up firm ownership among the founding team. Specifically, this study finds that nascent ventures are better off with an unequal ownership split among the founding team members. Although the results of this study offer a valuable contribution to lead founders and new businesses, the study looked at each start-up independent of another and is therefore not able to draw any conclusions related to competitiveness. This paper shows that, while convenient, the decision to divide ownership equally can hamper a nascent firm as it moves toward the launch phase of the start-up process. These results should motivate founders to think deeply regarding the ownership structure decision and, at the very least, consider the possible negative costs associated with the pursuit of founding team unity.
Keywords:
Cognition; Decision-making; Entrepreneurship; Nascent

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