New-Venture Team and Liability of Newness Quiz

Questions and Answers

What is the primary way in which nonemployee members of a start-up's newventure team help the firm?

Providing guidance

What is an inside director?

A person who is also an officer of the firm

What is the phenomenon referred to as when a high-quality individual agrees to serve on a company’s board of directors?

Signaling

What is an advisory board?

A panel of experts who provide counsel and advice on an ongoing basis Signup and view all the answers

Why do new ventures turn to consultants for help and advice?

Because new firms typically can’t afford to employ experts in many areas Signup and view all the answers

What is the primary purpose of assembling a talented and experienced new-venture team, as mentioned in the text?

To mitigate the liability of newness and overcome limitations related to customer and supplier relationships Signup and view all the answers

What is the significance of a heterogeneous founding team, according to the text?

Members with diverse abilities and experiences contribute to overcoming the liability of newness Signup and view all the answers

What does networking involve in the context of launching a new firm?

Building and maintaining relationships with people who are similar or whose friendship could bring advantages to the firm Signup and view all the answers

What is a skills profile, as mentioned in the text?

A chart depicting the most important skills needed in a new venture and where skills gaps exist Signup and view all the answers

What personal attributes affect a founder's chances of launching a successful new firm, based on the text?

Level of education, prior entrepreneurial experience, relevant industry experience, and the ability to network Signup and view all the answers

Study Notes

Non-employee Members and Start-ups

Nonemployee members of a start-up's new venture team contribute valuable expertise and perspectives, enhancing the quality of decision-making and strategic planning.

Inside Director

An inside director is a member of the company's board of directors who is also part of the company's management team, typically an executive.

High-quality Individual on the Board

The phenomenon of a high-quality individual agreeing to serve on a company’s board is often termed as "board recruitment," signifying trust and the potential for growth.

Advisory Board

An advisory board is a group of individuals who provide guidance, advice, and expertise to the organization but do not have formal authority or responsibilities like a board of directors.

Consultants in New Ventures

New ventures often turn to consultants for specialized expertise, industry insight, and mentorship that may not exist within the core team, helping to navigate challenges and optimize strategies.

Purpose of a Talented New-Venture Team

The primary purpose of assembling a talented and experienced new-venture team is to leverage diverse skills and experiences, which significantly increases the likelihood of the venture’s success.

Significance of Heterogeneous Founding Team

A heterogeneous founding team, composed of individuals with varied backgrounds and skills, enhances creativity, problem-solving capabilities, and resilience against market challenges.

Networking in New Firms

Networking involves building and maintaining professional relationships that can provide resources, knowledge, and opportunities essential for launching and growing a new business.

Skills Profile

A skills profile is a comprehensive inventory of the required skills and expertise needed within the team to fulfill the business objectives and overcome potential obstacles.

Personal Attributes of Founders

Personal attributes such as resilience, adaptability, leadership, and vision significantly impact a founder's chances of successfully launching and sustaining a new firm.