The Interplay of Different Types of Founders’ Experience and Entrepreneurial Funding

Abstract

Drawing on human capital theory, this study aims to explain how start-ups effectively signal prospects to acquire more financial capital. Based on early-stage start-ups that applied to 164 accelerators globally from 2013 to 2019, we examine the signals of three types of founders’ experience (i.e., task-specific experience, firm-specific experience, and general-purpose experience) and their interplay impact on entrepreneurial funding acquisition. We find that founders’ task-specific experience (i.e., prior entrepreneurial experience and CEO experience) positively affects entrepreneurial funding acquisition. Founders’ firm-specific experience (i.e., the tenure of the previous job) enhances the relationship between task-specific experience and entrepreneurial funding acquisition. However, founders’ general-purpose experience (i.e., education experience) doesn’t always significantly affect the link between task-specific experience and entrepreneurial funding acquisition. This study contributes to our scholarly and practical understanding of how different types of founders’ experience are associated with the success of acquiring financial capital.