Start-up experience as stepping stone to entrepreneurship

Small and young firms spawn more entrepreneurs compared to their larger and older counterparts. They serve as breeding ground of ideas and execution. In this study, I focus beyond the founding team and on the employees of startups and ask if employees exposed to early phases of start-ups (early hires) are more likely to enter entrepreneurship compared to employees who join the startup in a later phase (later hires). Startups are both employment generators and experimental environment providers that nurture their employees’ skills. They rely not only on founders but also on employee human capital. Like the returns of entrepreneurship that founders gain, employees can also have returns to their start-up experience. Though there is ample research on formation of founding team and complementarities among the founding team members, relatively fewer studies focus on human capital of early employees, who are also a key part of the start-up taking significant career risks like founding team members and constitute the major chunk of initial investment of start-ups. Organizational roles that employees hold in these start-ups also play a key role on their career path. I also look at how employees holding managerial or functional roles differ in their mobility decisions. Combining insights from literature that introduces joiners as different type of entrepreneurial actors, prevalence of small firm effect on entrepreneurial spawning and experimentation of employees with their career paths, I contribute to employee entrepreneurship literature using a novel linked employer-employee dataset of Indian internet based startups.