Abstract

A growing trend is the acquisition of startups as a source of competitive advantage. In this context, the presence of the founder creates a unique tension that must be considered. Employing a human capital we examine the impact the founders of acquired startups have on post-acquisition success, specifically on employee turnover. We analyze feedback from 369 employees of acquired startups. The findings indicate that levels of entrepreneurial culture and employee commitment post-acquisition are inversely related to employee turnover within the acquired firm. These relationships are found to be fully mediated by whether or not the founder is still in place.

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