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| Author: | Zhang, J. |
| Title: | The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs |
| Journal: | Small business economics
2011 : FEB, VOL 36:2 p. 187-208 |
| Index terms: | new enterprise venture capital companies entrepreneurship financing |
| Freeterms: | start-ups |
| Language: | eng |
| Abstract: | Entrepreneurs having prior firm-founding experience are assumed to have more skills and social connections than novices. Such skills and social connections could be of advantage to experienced founders in raising venture capital. This study uses a large database of venture-backed companies and their founders to examine the possible advantage of prior founding experience. Compared to novice entrepreneurs, entrepreneurs having experience from venture-backed founding tend to raise more venture capital at an early round of financing and move on from the early round much faster. However, experienced founders with no previous venture-backed firms do not exhibit a similar advantage over novice entrepreneurs, suggesting the importance of venture capitalist connections in the early stage of financing. However, when also taken into account later rounds of financing, all entrepreneurs with prior founding experience tend to raise more venture capital. This suggests that skills acquired from any previous founding experience can improve an entrepreneur's performance and also attract more venture capital. |
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