Nonentrepreneurial work history may be indicative of important skills necessary to manage a new business. Gimeno et al. (1997) found that industry specific experience contributed to both survival and growth, though they observed no significant
relationship between general professional experience and either venture survival or growth. We expect prior professional experience to serve as a cue for venture capitalists. The implied endorsement of having worked at a high status firm may convey legitimacy to wouldbe investors (Stuart et al., 1999). Moreover, Burton et al. (2002) argue that entrepreneurs may
inherit entrepreneurially specific legitimacy if their former employer possesses a reputation for spawning higher quality start-ups than others. Hence, we hypothesize that the source of professional experience may also be a cue for venture capitalists and inform about the communicative role: We hypothesize: