SUMMARY Team projects are used in a variety of entrepreneurship and small business management courses because they provide distinctive benefits to both learners and instructors. Indications are that they will continue to because of the benefits. Such benefits, however, are totally dependent upon members of the team and their individual levels of effort and contribution. When some members become social loafers or free riders, a team's effort is often greatly impaired. It is important to realize that social loafing and free riding are not inevitable in collective team efforts. Research reveals that these phenomena often do not occur when (1) team goals are compelling; (2) the task involved is challenging, appealing, or involving; and (3) individual performances are identified, monitored and rewarded. Many social psychologists believe that identification of individual performance is the key to more effective use of teams in both classrooms and the workplace. Identification of individual team member work and effort, in turn, permits more equitable grading of team members based on their individual contributions to the overall team effort. To a large extent, the problem of inequitable contributions can be lessened with the grading system that gives appropriate weight to both individual contributions and team achievement. This paper has focused on the importance of entrepreneurial teamwork competencies and the use of peer assessment as a methodology for identifying individual performances. The paper has presented assessment instruments that were developed using the criteria of dependability / trustworthiness and appreciation of team members, contribution of effort, standard quality, promotion of shared goals, facilitation of goal achievement. Distribution of team tasks and overall assessment. These criteria were tested using multiple regression analysis. Examples have shown individual performances in a team differ appreciably, suggesting that the single team grade given to all members might not be equitable. This analysis also has discussed approaches to grading individual team members based on their contributions to the overall effort, as assessed by their peers. These instruments are not recommended, however, for use as the sole criterion in grading team performance. Rather, they should be used as part of an overall assessment process that facilitates more effective grading of team in entrepreneurship courses.