Unlocking founding team prior shared experience: a transactive memory system perspective

Although new ventures are often started by founders with prior shared experience, which has been shown to benefit new venture performance, the mechanisms underlying this effect remain under-examined. It therefore becomes challenging to exploit this entrepreneurial resource in practice. Drawing insights from the team familiarity and cognition literatures, I posit that the prior shared experience effect is partially mediated by a team-level cognitive process-transactive memory system that enables founding teams to effectively and efficiently integrate their members' expertise and skills. Two team-level factors-task similarity and intra-team trust further strengthen the effects of transactive memory systems because they provide golden opportunities and strong motivation for team members to utilize their transactive memory systems. Analyses using survey data collected from approximately 100 start-ups in four regions of China largely support these hypotheses. The theoretical and practical implications of these results are discussed. © 2011 Elsevier Inc.postprin