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When do serial entrepreneurs found innovative ventures? Evidence from patent data

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Experienced entrepreneurs are typically considered to be wellsprings of both wealth creation and innovation. However, given that prior research has provided evidence of an inverse relationship between economic performance and innovation performance, innovation performance of experienced entrepreneurs requires greater scrutiny. In this study, we examine the question: under what conditions do serial entrepreneurs produce impactful innovations in their subsequent ventures? Using data on 334 VC-funded companies, our study suggests that the familiarity garnered by founders through their prior industry experience may limit the venture’s propensity to produce impactful innovation. Our findings contribute to the literature on serial entrepreneurship and innovation.

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  1. We conceptualize innovation as “a new idea, which may be a recombination of old ideas, a scheme that challenges the present order, a formula, or a unique approach” (Van de Ven 1986: 591).

  2. We study innovation by examining the patenting activity (inventions) of the firms in our sample. Although patents represent an intermediate innovation output, they have been found to be highly correlated with alternative measures of innovation performance (Hagedoorn and Cloodt 2003) and as such are considered reasonable proxies of firm innovation performance in high tech industries by scholars (Harhoff et al. 1999; Jaffe and Trajtenberg 2002).

  3. The limited evidence on the implications of prior entrepreneurial experience on innovation performance has principally relied on self-reported survey data for measuring the innovativeness of the venture.

  4. Firms were considered to have unreliable performance data when the outcome from the prior venture was not established prior to the founding of the later venture.

  5. A firm is considered successful if either of the following events occurred: (i) the firm went public, or (ii) the firm was acquired in a deal whose purchase price was greater than the total amount of capital raised by the firm. Successful firms were coded as 1 and unsuccessful firms were coded as 0.

  6. These consisted of indicators of the serial entrepreneurs’ human capital including education (type and number of educational degrees), inventor status (binary variable indicating whether or not the entrepreneur was an inventor), and work experience (type and number of years).

  7. Functional categories included were finance and accounting, production and operations, technology development, marketing, and general management. Educational categories included were Ph.D., masters, undergraduate degree, and other.

  8. The variables for the type of founder education were coded as binary variables while the variables for the number of prior experiences were coded as count variables.

  9. Given the small size of this sample, we were unable to get the models to converge with all our control variables intact. Hence, we dropped the location and industry dummies to obtain the regression estimates for this model.

  10. These results are available from the authors on request.

  11. We thank an anonymous reviewer for this insight.

  12. We thank an anonymous reviewer for this insight


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The authors gratefully acknowledge the insightful comments of the editor and an anonymous reviewer that substantially improved the article. We thank Dr. Warren Boeker, Dr. Suresh Kotha, Dr. Kevin Steensma, Dr. Arvin Sahaym, Dr. Thomas Allison, Dr. Benjamin Warnick, Dr. Terence Saldanha, Dr. Abhinav Gupta and Dr. Mike Wright for helpful comments and conversations on previous versions of this manuscript. We thank Dr. Sudipta Sinha for his help with developing the algorithm for disambiguating the patent data used in this study. We thank Dr. David Bryce and Dr. Sydney Winter for sharing the general interindustry relatedness index used in this study.

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Correspondence to Amrita Lahiri.

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Lahiri, A., Wadhwa, A. When do serial entrepreneurs found innovative ventures? Evidence from patent data. Small Bus Econ 57, 1973–1993 (2021).

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