Early Joiners and Startup Performance

Joonkyu Choi, Nathan Goldschlag, John Haltiwanger and J. Daniel Kim

No 28417, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We show that early joiners—non-founder employees in the first year—of a startup play a critical role in explaining firm performance. We use administrative employer- employee matched data on all US startups and utilize the premature death of workers as a natural experiment exogenously separating talent from young firms. We find that losing an early joiner has a large negative effect on firm size that persists for at least ten years. When compared to that of a founder, losing an early joiner has a smaller effect on firm death but intensive margin effects on firm size are similar in magnitude. In contrast, losing a later joiner yields only a small and temporary decline in firm performance. We provide evidence that is consistent with the idea that organizational capital, an important driver of startup success, is embodied in early joiners.

JEL-codes: J24 L23 L26 (search for similar items in EconPapers)
Date: 2021-01
New Economics Papers: this item is included in nep-bec, nep-ent, nep-hrm, nep-lma and nep-sbm
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Working Paper: Early Joiners and Startup Performance (2023)
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