Entrepreneurial Spawning: Experience, Education, and the Role of Venture Capital

31 Pages Posted: 3 Oct 2014 Last revised: 22 Jan 2015

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Uwe Walz

Goethe University Frankfurt - Institute of Economics; Center For Financial Studies (CFS); Goethe University Frankfurt - Research Center SAFE

Jochen Christian Werth

Goethe University Frankfurt

Date Written: September 30, 2014

Abstract

We present theory and evidence on the careers of high-tech entrepreneurial founders prior to obtaining venture capital (VC), and after VC exit. Prior to obtaining VC, entrepreneurs may have started other ventures, worked as a salaried employee in a startup, or worked for a large company. Upon VC exit, the founding entrepreneur may become a salaried employee, start another firm (‘serial entrepreneur’), or become a business angel that invests in other entrepreneurs. Our detailed data resting on the CrunchBase online database indicate that VC exit systematically spawns serial entrepreneurs only in cases where the entrepreneur (1) had experience either in founding other startups or working for a startup prior to receiving VC, (2) had a ‘jack-of-all-trades’ education, or (3) achieved substantial financial success upon VC exit.

Keywords: entrepreneurship, entrepreneurial spawning, angel finance, venture capital, exit

JEL Classification: G24, J23, J24, L20, M13

Suggested Citation

Cumming, Douglas J. and Walz, Uwe and Werth, Jochen Christian, Entrepreneurial Spawning: Experience, Education, and the Role of Venture Capital (September 30, 2014). Available at SSRN: https://ssrn.com/abstract=2503532 or http://dx.doi.org/10.2139/ssrn.2503532

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Uwe Walz

Goethe University Frankfurt - Institute of Economics ( email )

Postfach 81
D-60054 Frankfurt
Germany

Center For Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Goethe University Frankfurt - Research Center SAFE ( email )

(http://www.safe-frankfurt.de)
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

Jochen Christian Werth (Contact Author)

Goethe University Frankfurt ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

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