Small Business Leadership: Does Being the Founder Matter‪?‬

Introduction Leadership capability is widely considered a critical variable in the success of an entrepreneurial venture and has been shown to be a key variable for venture funding decisions (Chandler and Hanks, 1994). Indeed, the entrepreneur has been described as a "capable executive and more" (Sexton and Bowman, 1985: 129). If an entrepreneur is an executive and not simply a founder, the question arises as to how an entrepreneur's behavior may translate into managerial characteristics, and whether there is any difference between founder chief executive officers (CEOs) and non-founder chief executives. Indeed, in their comparison of entrepreneurs with managers, Busenitz and Barney (1997: 10) noted, "entrepreneurs sometimes make bad managers." The purpose of this paper is to empirically test whether there are managerial differences between founder and non-founder CEOs of small and medium-sized enterprises. We report preliminary findings of a study of 151 chief executives and their firms, examining measures of proactive behavior, strategic posture, and organization structure.