The Magnetic Value of Entrepreneurial Passion for Potential Employees

Abstract

When new ventures tap into the labor market, they must battle with more established companies to recruit top human capital. We examine how an attribute known to influence new venture funders, entrepreneurial passion, also contributes to the ability of the firm to recruit employees. Through conjoint analysis of potential employee ratings of the attractiveness of working at a new venture, we demonstrate the importance of perceived passion of founders to potential employees. We show that a founder’s perceived passion for their product and for growth can enhance employer attractiveness when founders are perceived to have high human capital, but more importantly, can also compensate for founders with limited human capital. When considered together, perceived passion for product or passion for growth can compensate for low human capital of founders in attracting employees to new ventures.