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  "documentTitle": "Throne vs the kingdom",
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      "kind": "callout",
      "text": "Hypothesis 2: For a given startup, the value of the startup varies inversely with the degree of control retained by founders.",
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      "text": "12 Two other factors may reinforce this tradeoff. Even though – from a resource-dependence perspective – we would expect to see that the attraction of resources helps build the value of the company, the effect may also be effective in the other direction: A potential resource provider’s confidence that the company can become valuable may enable the core founder to attract that resource provider. (My empirical tests do not assume that the causality runs in one direction or the other.) Furthermore, some early choices may constrain or reinforce later choices. For instance, choosing to self fund may constrain the startup’s later hiring (because it doesn’t have enough money to attract the best hires) and thus value creation. Thus, such path dependence may strengthen the tradeoff.",
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      "text": "Does the tradeoff apply across the board, or to only some contingencies? On the one hand, these resource-dependence challenges may be stronger for different types of companies and in different contexts. Thus, it’s possible that the tradeoff only applies to a subset of companies and that that subset is driving the results, rather than being significant across all situations. On the other hand, the tradeoff may be more universal, in that it applies across contingencies. To test these “contingent vs. universal” possibilities, I assess contingencies regarding what type of startup was founded and its evolution over time. First, the tradeoff may differ according to the degree to which the",
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      "kind": "paragraph",
      "text": "not backed by VCs (Baker and Gompers 1999). Because the best VCs can add value – and board capital – founders are willing to take from them investment terms that are less founder-friendly (Hsu 2004).",
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      "text": "Although less studied, similar arguments suggest that there is a spectrum of value that can be added by the other types of resource providers attracted to startup coalitions. For instance, the larger the founding team, the higher the startup’s growth (Eisenhardt and Schoonhoven 1990) and the greater the company’s revenues (Cooper and Bruno 1977). Up to the point where an increase in team size can compromise outcomes (e.g., Horwitz and Horwitz 2007), attracting cofounders and non-founding hires should help grow the value of the startup, but at cost of imperiling control.12",
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      "kind": "paragraph",
      "text": "As a result, controlling for company age and other differences across startups, there should be a tradeoff between control and company value.",
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