Conflict within new venture teams (NVTs) is a critical factor influencing the success or failure of new ventures. Despite its importance, empirical evidence on the dynamics of conflict interactions and their influence on affective team outcomes and eventual venture exits remains scarce. To address this research gap, we draw on Social Baseline Theory to investigate how physiological arousal and physiological linkage during conflict shape subsequent team satisfaction and exit intentions. Using a longitudinal observational lab study design inspired by marriage research, we examined 78 dyadic NVTs. Physiological arousal and linkage were assessed using non-invasive sensors that tracked inter-beat intervals (IBI) and galvanic skin response (GSR). Team satisfaction and exit intentions were evaluated through follow-up questionnaires administered six months later. Our results reveal that physiological arousal, as measured by IBI variability and levels, significantly decreases team satisfaction and increases exit intentions. IBI linkage exhibits a small, decreasing effect on exit intentions. This study provides a novel perspective on conflict dynamics within NVTs, offering actionable insights for identifying promising teams early in the entrepreneurial lifecycle based on their physiological responses during conflict.
