Beyond the Startup Stage: The Founding Team’s Human Capital, New Venture’s Stage of Life, Founder–CEO Duality, and Breakthrough Innovation

Daniel Tzabbar () and Jaclyn Margolis ()
Additional contact information
Daniel Tzabbar: LeBow College of Business, Drexel University, Philadelphia, Pennsylvania 19104
Jaclyn Margolis: Graziadio School of Business and Management, Pepperdine University, Los Angeles, California 90045

Organization Science, 2017, vol. 28, issue 5, 857-872

Abstract: Using a unique longitudinal study of U.S. biotechnology ventures, we advance extant research by showing that a founding team’s educational heterogeneity and prior founding experience have a positive and significant effect on the likelihood of a firm’s creating breakthrough innovation. However, we demonstrate that these relationships depend on the firm’s stage of life and decision-making structure as reflected in its founder–CEO duality. Specifically, we show that the positive effect of a founding team’s human capital is stronger in the growth stage than the early stages of a startup. While founder–CEO duality increases the positive effect of the founding team’s human capital in the startup stage, during the growth stage, such a structure reduces the impact of the founding team’s human capital. Therefore, to fully appreciate the effect of human capital on a venture’s success in breakthrough innovation, we must consider both the firm’s stage of life and its decision-making structure. As such, our theory provides a meeting ground for economists and organizational theorists on issues associated with human capital, founder’s power, the life cycle of new ventures, and technological entrepreneurship.

Keywords: founding team; human capital theory; decision-making structure; life cycle of new ventures; breakthrough innovation; technological entrepreneurship (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
https://doi.org/10.1287/orsc.2017.1152 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:28:y:2017:i:5:p:857-872

Access Statistics for this article

More articles in Organization Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().