How Significant Events and Team Trust Predict Member’s Exit in New Venture Teams

This paper examines how the significant events and team member trust in new ventures affect exit from the team. We consider team member exit as an outcome that affects both individuals, the team, and the performance of the new venture. We develop our arguments based on event system theory, which is specifically beneficial to understand how new ventures develop. We test our arguments using a unique longitudinal data set that follows 108 teams and their 218 members over a year using repeated questionnaires (n=782). We use a Bayesian and joint modeling approach to model team turnover and correct for non-ignorable non-responses under population heterogeneity. We find that team members' level of trust affects how they perceive significant events (novel and disruptive). Trust does not affect team members’ exit. Disruptive events are strongly associated with team members’ exit. This suggests that disruptive events mediate the effect of trust on team members’ exit. We discuss the implications of our results for theory.