Weathering the pivot: Stability and turnover in new venture teams

Abstract

Research on strategic change and NVT turnover suggests that members of the new venture team are likely to depart during a pivot as a result of structural changes within the firm. However, this perspective overlooks the relational aspect of venturing, which bonds team members to their ventures. Although NVT members are critical to both the creation of economic profit and the operational viability of the firm, at present we have little understanding of whether the decision to pivot strengthens or weakens their commitment to the firm. Using the employment data of 91 new venture teams that underwent a pivot, we examine how the sudden changes that are brought about affect the stability of the team in the 12-weeks leading up to and following their occurrence. In doing so we help integrate the literature on NVT turnover and entrepreneurial bonding, and provide a fuller distribution of the outcomes that accompany new venture pivots.