Abstract

Prior research has discovered that high-growth firms contribute disproportionately to positive economic outcomes. Despite their significance, the high-growth periods that define these firms have proven difficult to predict. In this paper, we study the impact of human capital endowments of new ventures on their subsequent growth. In particular, we focus on prior experience in founding firms that have reached high growth. Several theoretical mechanisms suggest that founding teams with prior experience in founding high-growth firms are more likely to start new ventures that also become high growers. For example, members of these kinds of founding teams have arguably learned skills, gathered resources, built networks, etc., which can be critical for entrepreneurial success. Even if the founders depart shortly from the newly founded firm, the initiated structures and procedures can remain stable. Furthermore, these ‘elite’ entrepreneurs are likely to have a higher ability recognize high-potential opportunities and forgo the pursuit of lower potential ones.

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