ALLEVIATING THE COSTS OF STEWARDSHIP: MULTIPLE-FOUNDER MANAGEMENT TEAMS, POWER DISPERSION, AND IPO PERFORMANCE

Scholars often conceptualize firm founders as organization-serving stewards rather than as self-serving agents. Yet, evidence of any association between founder-management and firm performance remains equivocal at best. To address this discrepancy, we argue that stewardship has its own costs, and that these costs can counteract the benefits of founder-management. In the present research, we develop a model predicting that the presence of multiple founders on an IPO firm’s management team will engender mutual monitoring, and thus superior IPO performance. We further argue that the dispersion of power across founders drives this positive effect. Using a sample of 1,009 founder-managed IPO firms, we find that multiple-founder management teams do, in fact, generate higher IPO premiums than do lone-founder management teams.