Joining Forces : How Can Founding Members’ Prior Experience Variety And Shared Experience Increase Startup Survival?

In extant work, two arguments have emerged on the relationship between founders’ experience and startup survival. First, founders’ diverse experiences should foster startup survival because the combination of various experience-based knowledge components drives the needed innovation. Second, founders’ shared experience in an incumbent firm in the industry of the startup should positively relate to startup survival because of the transfer of shared knowledge and routines. This paper reconciles both streams of research by proposing that startups can combine both types of experience-based advantages when founding teams are composed of founders who individually possess a variety of firm experiences and other founders who jointly transition from the same industry incumbent. Using a sample of startups in technological manufacturing industries, I test the direct effect of the two types of experiences and their complementarity in decreasing the likelihood of startup failure. The results show that such complementarities exist so that startups are less likely to fail when their founding teams combine within-founder experience variety and across-team shared experience. I discuss the implications of these findings for startup survival and founding team literature streams