Experienced Entrepreneurial Founders and Venture Capital Funding

Hsu, David H.

doi:10.2139/ssrn.584702

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Experienced Entrepreneurial Founders and Venture Capital Funding

35 Pages Posted: 2 Sep 2004

See all articles by David H. Hsu

David H. Hsu

University of Pennsylvania - Management Department

Date Written: August 15, 2004

Abstract

Using a novel dataset of 149 early stage start-up firms, I empirically examine how prior entrepreneurial founding experience affects the timing and valuation of venture capital (VC) funding. Such founding experience results in both enhanced skill in building current start-ups and in improved social capital that can be used to, for example, recruit executive officers. The results suggest that entrepreneurs differ in accumulated human and social resources, which in turn have measurable effects on VC timing and valuation. The results are accentuated for entrepreneurs with financially successful prior founding experience. The study concludes with implications for academics and managers.

Keywords: Entrepreneurial experience, venture capital, human capital, social capital

JEL Classification: M13, G24, A14

Suggested Citation: Suggested Citation

Hsu, David H., Experienced Entrepreneurial Founders and Venture Capital Funding (August 15, 2004). Available at SSRN: https://ssrn.com/abstract=584702 or http://dx.doi.org/10.2139/ssrn.584702