Founding the Future: The evolution of teams from founding to IPO•

We develop an evolutionary theory of entrepreneurial top management teams highlighting that entrepreneurial teams follow a path-dependent process where the founding team shapes the quality and characteristics of subsequent executive teams. By attracting top managers who are both similar to the founders and experienced in their own right, experienced founding teams accrue long-term advantages. Using empirical techniques from the top management team demography literature we simultaneously examine the importance of founders and current executives and demonstrate that both shape firm outcomes. We find that experienced founders who build an early team with a full complement of organizational roles both achieve important milestones faster and attract more experienced top managers. When firms cannot have both experienced people and diverse roles at founding, we find it is easier to add organizational roles than individual experience as firms grow. By examining the origins of top management team experience and heterogeneity, we bring together entrepreneurial and organizational demography research and offer insights into the black box of team composition.