Prior work on founding teams has often focused on the effects of founding team composition on venture success. However, we still know little about how founding teams come together in the first place. In this paper, we examine how the sequence of cofounder additions affect venture fundraising. Drawing upon Van de Ven & Poole's (1995) typology of organizational development, we develop a model about the optimal sequence of cofounder additions. Using data from Y Combinator and Revelio Labs, we found evidence of inertia; lead founders are more likely to add cofounders from the same rather than different backgrounds and this approach to team formation hinders fundraising. We did not find evidence of ordering effects: business leads who later add technical cofounders raise similar amounts of funding as technical leads who later add business cofounders. And finally, founding teams that oscillate between business and technical cofounders with each cofounder addition raise more funds than founding teams that only shift once between business and technical cofounders. We introduce an oscillation theory of founding team formation and offer evidence about how entrepreneurs should assemble their founding teams.
