The relationship between entrepreneurs’ founding experience, investing angels and start-ups’ technological output

Entrepreneurial experience can help entrepreneurs overcome obstacles and improve firm performance. Despite the knowledge accumulated in the literature regarding the effect of entrepreneurial experience on firm performance, the nature of the relationship between the founding experience of entrepreneurs and the technological output of start-ups remains unclear: is technological performance directly influenced by entrepreneurs’ founding experiences, or does this experience facilitate something else that drives technological performance? We describe how entrepreneurs; founding experience fosters performance by attracting angel investors. In turn, these angels are directly linked to patents and subsequent citations. We use a comprehensive database of the Israeli high-tech industry frequently used by official institutions, including the Israeli government, and USPTO patent data. We analyze 5,23 young start-ups in seven technology industries led by 9,881 entrepreneurs, of which 2,237 have founding experience. These start-ups were associated with 1,898 patents and 21,357 citations to these patents, and 3,553 angels invested in some of these start-ups. The results indicate a sequence where angels mediate the relationship between experienced entrepreneurs and technological output. The research highlights the role of founding experience in signaling angels and the direct link between angels and patenting activity. We discuss the implications for start-ups and policymakers