Events

Dr. Jihae Shin
Assistant Professor of Management and Human Resources
Wisconsin School of Business
University of Wisconsin-Madison

Bringing on a partner is one of the earliest and most salient decisions an entrepreneur makes when starting his or her venture. We examine how an entrepreneur’s motivation for starting a business is an important consideration vis-à-vis partnership decisions—and how founder motivation and partnership jointly affect the likelihood of achieving startup initial profitability. Using the PSED II dataset, a representative sample of 1214 nascent entrepreneurs in the United States, we find that highly intrinsically motivated entrepreneurs—those who are motivated by interest in the business itself—are less likely to, and take longer to, achieve initial profitability when they do not have a partner, but that these negative associations are absent when they have a partner. Highly extrinsically motivated entrepreneurs—those motivated by money or legacy, on the other hand—are more likely to achieve initial profitability and to do so more quickly, regardless of whether they take on a partner. We end with a discussion of entrepreneurial motivation and the hidden costs for those entrepreneurs motivated by the passion and interest in the startup idea, and the dynamics behind entrepreneurial partnerships in attending to startup success and outcomes.