This talk will examine the evolution of young ventures by considering the relationship between their delineation of functional roles and their ability to attract resources from venture capital investors. Prior research has suggested that ventures formalize roles and introduce functional specialists as they evolve as part of a process sometimes referred to as professionalization. I will clarify and distinguish the types of functional roles that ventures introduce and theorize how the formal dedication of personnel to each of these domains helps attract funding. My study proposes that the degree of importance of each role type varies at different points in the venture's development as a result of changing loci of investor concerns and norms about what constitute critical activities across funding stages. Predictions are tested using a novel longitudinal dataset that combines information on how 2,627 San Francisco-based technology ventures internally organized across their entire early lives with information on their success in progressing between the first three funding stages. This study contributes to research on organizational evolution, entrepreneurship, and organizational design.
Professor Ranjay Gulati is the Chair of Harvard Business School's Advanced Management Program. He has directed several executive education programs on such topics as Building and Leading Customer Centric Organizations, Leadership in Turbulent Markets, Managing Strategic Alliances, and Sustaining Competitive Advantage. Some of his prior work has focused on the enablers and implications of within-firm and inter-firm collaboration. He has looked at both when and how firms should leverage greater connectivity within and across their boundaries to enhance performance.