team members, ventures associated with business
planning documents that report more prior
entrepreneurial experience are more likely to
receive funding.
Nonentrepreneurial work history may be indicative
of important skills necessary to manage a new
business. Gimeno et al. (1997) found that industryspecific
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:
Hypothesis 7: Ventures associated with business
planning documents that refer to the prior professional
business experience of founding team
members are more likely to receive funding.
Hypothesis 7a: Conditional on business planning
documents containing a reference to professional
business experience, ventures associated
with planning documents that refer to
greater prior professional business experience
of management team members are more likely
to receive funding.
Hypothesis 7b: Conditional on business planning
documents containing a reference to professional
experience, ventures associated with
planning documents that reference prior professional
business experience at entrepreneurially
prominent firms are more likely to receive
funding.
Interpretation of the corresponding tests of
Hypotheses 5, 6, and 7 and their conditional corollaries
follow the logic summarized in Table 1
team members, ventures associated with business
planning documents that report more prior
entrepreneurial experience are more likely to
receive funding.
Nonentrepreneurial work history may be indicative
of important skills necessary to manage a new
business. Gimeno et al. (1997) found that industryspecific
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:
Hypothesis 7: Ventures associated with business
planning documents that refer to the prior professional
business experience of founding team
members are more likely to receive funding.
Hypothesis 7a: Conditional on business planning
documents containing a reference to professional
business experience, ventures associated
with planning documents that refer to
greater prior professional business experience
of management team members are more likely
to receive funding.
Hypothesis 7b: Conditional on business planning
documents containing a reference to professional
experience, ventures associated with
planning documents that reference prior professional
business experience at entrepreneurially
prominent firms are more likely to receive
funding.
Interpretation of the corresponding tests of
Hypotheses 5, 6, and 7 and their conditional corollaries
follow the logic summarized in Table 1
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