درباره درایور های رشد تازه کارها با تکنولوژی بالا : بررسی نقش سرمایه و سرمایه گذاری سرمایه انسانی بنیان گذاران "

In this paper, we jointly analyze the effects of the human capital of founders and access to venture capital (VC) financing on the growth of 439 Italian new technology-based firms (NTBFs). We rely on econometric models that control for survivorship bias and the endogeneity of VC financing. As to non-VC-backed firms, the competence-based argument that the capabilities of NTBFs coincide with founders' skills is confirmed. Nonetheless, once a NTBF obtains VC, this coincidence vanishes, pointing to the “coach” function performed by VC investors. Conversely, the view that sees the “scout” function as the main task performed by VC investors is not supported.

The entrepreneurship literature generally agrees that the human capital of founders and access to venture capital (VC) are two key drivers of the success of new technology-based firms (NTBFs). Nonetheless, there is no consensus on the reasons for this. In this paper we shed new light on the relative importance of the mechanisms through which founders' human capital and VC investments enhance the growth performances of NTBFs. While addressing this research question, we add to the extant theory on the growth of NTBFs providing a better understanding of the respective roles of NTBFs' founders and VC investors and of the nature of their contribution to the success of these firms. As to founders' human capital, the competence-based view contends that higher human capital individuals establish more successful firms; in other words, there is a direct positive effect of founders' human capital on firm growth. Studies in the entrepreneurial finance literature argue that NTBFs created by higher human capital individuals enjoy an advantage in attracting VC. In turn, VC investments lead to superior growth. According to this latter argument, the positive effect of founders' human capital on growth is indirect, being mediated by the attracting of VC. As to VC, previous studies (e.g. Baum and Silverman, 2004) again highlight different motives explaining why access to VC propels the growth of NTBFs. On one hand, VC investors may have better “scout” capabilities than other investors and so they may be able to pick high-growth prospect firms. On the other hand, they may provide portfolio firms with additional competencies and resources, thus exerting mainly a “coach” function. We claim that to shed new light on the mechanisms through which founders' human capital and VC financing contribute to the growth of NTBFs, these factors need to be examined jointly. In the empirical section of the paper, we consider a sample of 439 Italian NTBFs, which operate both in manufacturing and services. We first follow the “endogenous treatment effect” literature (Heckman, 1990 and Vella and Verbeek, 1999) and assess the effects of the human capital of founders and VC investments on firm growth, measured by both employees and sales, while controlling for the endogenous nature of VC investments. Controls for a possible survivorship bias in sample data are also considered. Second, we allow the effects of founders' human capital on firm growth to differ depending on whether firms are VC-backed or not. For this purpose, we resort to an endogenous switching regression approach (Maddala, 1983 and Greene, 2003). The econometric estimates show that even after controlling for sorting, VC financing has a large positive effect on growth. More interesting, the human capital of the founding team has both a direct positive effect on growth and an indirect effect through the attracting of VC financing. Nevertheless, the specific human capital characteristics of founders that are directly associated with firm growth partially differ from those that positively influence access to VC. In addition, the human capital characteristics explaining the growth of NTBFs not resorting to VC financing lose their explanatory power for VC-backed firms. These results indicate that there is a close relation between the knowledge and skills of firms' founders and firms' distinctive capabilities; however once a NTBF obtains VC, this relation vanishes. To sum up, the results of this paper are in line with the argument of the competence-based stream that founders' knowledge and skills are a fundamental ingredient of the growth of NTBFs. They also highlight that VC investors are an important source of additional resources and capabilities for NTBFs due to the “coach” role they perform to the advantage of portfolio firms. So their function goes far beyond the provision of financing to high-prospect, financially constrained NTBFs. Conversely, the view that sees the “scout” function as the main task performed by VC investors is not supported by our findings. Last, this study indicates the need for a more thorough modeling of the matching process between NTBFs and VC investors in order to expand the theory of the growth of NTBFs.

In this paper, we have empirically examined the joint effects of the human capital of the founding team and VC investments on firm growth in a sample of 439 Italian start-ups that operate in high-tech sectors, both in manufacturing and services. We have used a cross-sectional econometric methodology that aims to control both for a possible survivorship bias in the data and for the endogenous nature of VC financing. Use of a panel data set including longitudinal observations of both surviving and failed firms, would allow a more careful analysis of the endogenous nature of VC financing, while better controlling for survivorship bias. Unfortunately, this was not possible because of lack of data. We acknowledge it as a limitation of the present study. Nonetheless, our econometric methodology has two important strengths. First, it allows to disentangle the direct positive effect of founders' human capital on the growth of NTBFs from the indirect effect mediated through access to VC financing. Second, it allows to assess whether the impact on NTBF growth of human capital variables (and other explanatory variables) differs according to the VC status (either VC-backed or non-VC-backed) of sample firms. In accordance with the evidence provided by previous studies inspired by the competence-based perspective (e.g. Cooper and Bruno, 1977, Feeser and Willard, 1990 and Colombo and Grilli, 2005a), our findings clearly show that firms founded by individuals with selected human capital characteristics (i.e. greater university-level education in management and economics and greater prior work experience in technical functions in the sector in which the new firm operates) can leverage the distinctive capabilities associated with the knowledge and skills of their founders to grow larger than other firms. So founders' human capital has a direct positive effect on firm growth. It also has an indirect positive effect mediated by access to VC and the dramatic positive impact on firm growth of VC investments, as suggested by the entrepreneurial finance literature. In particular, our econometric results confirm the evidence provided by previous empirical studies that VC investments are attracted by the perceived management competence of firms' founding team, proxied here by the presence in the entrepreneurial team of one or more individuals with prior managerial experience. The university-level education in management and economics of founders also has a positive effect on the likelihood of receiving VC. The joint consideration of human capital variables and VC financing has the additional advantage of helping disentangle the relative importance of the “scout” and “coach” functions performed by VC investors to the advantage of portfolio NTBFs. First of all, as is apparent from the above remarks, there is only a partial overlap between the human capital characteristics of founders that have a direct positive effect on growth and those that attract VC investments. Moreover, other observable (i.e. the size of the founding team) and unobservable factors that are found to positively influence firm growth turn out to be either unrelated or even negatively related to the probability of obtaining VC. These results echo those of Baum and Silverman (2004), which show that the top management team characteristics of Canadian biotech start-ups that attract VC investments have little explanatory power of the subsequent growth performances of these firms. So our findings suggest that the “hidden value” of several high-prospect NTBFs is possibly not perceived by VC investors. It may be the case that Italian VC investors having limited “scout” capabilities rely more on social ties within an “old boys network” than on a thorough assessment of firms' distinctive capabilities in selecting their investments ( Shane and Stuart, 2002). Alternatively, these results indicate that high-prospect NTBFs may self-select out of the VC market. Whatever be the reason, some NTBFs with great growth potential are prevented from obtaining VC and becoming high-growth firms because of sorting inefficiencies. Second, the estimates of the endogenous switching regression model document that the human capital characteristics of founders directly associated with the growth of non-VC-backed firms lose their explanatory power for their VC-backed counterparts. In other words, once NTBFs receive VC, the close relation between founders' and firms' distinctive capabilities largely vanishes. These findings are consistent with the econometric evidence provided by previous studies that documented the “coach” function of VC investors (e.g. Hellmann and Puri, 2002). They are also in line with the results of qualitative empirical studies according to which the assistance provided by VC investors to portfolio companies in business management and/or operational issues is more valuable if entrepreneurs have less industry-specific work experience (Barney et al., 1996) or start-up experience (Sapienza and Timmons, 1989. For divergent results see Sapienza et al., 1996). To gain further insights into the type of support provided by VC investors to sample firms, we interviewed the owner-managers of 22 Italian VC-backed firms included in the RITA database. The majority of these firms confirmed that because of the certification effect of being VC-backed and the network of business contacts of the VC investor, after obtaining VC it became much easier for them to have access to external resources and capabilities, especially through the establishment of commercial alliances (see also Colombo et al., 2006). Moreover the areas in which the VC investor provided the most valuable assistance are finance, accounting, corporate governance, and strategy formulation, that is areas in which founders were less competent. In our view, these results substantially extend our understanding of the effects of the human capital of founders and VC investments on the growth of NTBFs. While there is agreement in the extant entrepreneurship literature that these factors are two fundamental drivers of growth, the mechanisms through which they positively influence growth deserve a more careful scrutiny so as to better assess their relative importance. Our study contributes to close this gap. In accordance with the competence-based perspective, it clearly shows that both founders and VC investors are important sources of distinctive capabilities for NTBFs. This study also raises some interesting theoretical questions. One might presume that the capabilities of founders and those of VC investors are differentiated and that synergistic gains can be generated if they are used in combination rather than in isolation. Conversely, our econometric results suggest that VC investors are attracted by NTBFs to which their “coach” role is most valuable (see de Bettignies and Brander, 2007 for an analogous conclusion from a theoretical perspective); these firms do not necessarily coincide with those that would mostly benefit from VC investments. As a corollary, the alleged synergistic gains that were mentioned above may remain unexploited because of (socially ineffective) sorting. In our view a more comprehensive and accurate model of the matching process of NTBFs and VC investors would be an important step forward to build a better theory of the growth of NTBFs. As was proposed by Eckhardt et al. (2006) this matching is the result of a double selection process. First, firms decide whether to look for VC investors or not. For instance, high-prospect NTBFs may self-select out of the VC market, being possibly discouraged by the large opportunity costs of searching for VC or their weak bargaining position in negotiating a deal. Second, matching occurs between firms that are looking for VC and VC investors that are looking for good investment opportunities. In modeling this matching process, one has to consider that its results are contingent on several factors. These include the “scout” ability of VC investors, the value that can be created by combining their capabilities with those of firms' founders, and the bargaining power of the two parties, which again depends among other things on their capabilities. Moreover, different types of VC investors (e.g. less versus more experienced investors, independent VC funds versus corporate VC investors) are likely to have different “scout” and “coach” capabilities, and different bargaining power (see also Dimov et al., 2007 on the importance of considering VC investors as heterogeneous decision makers). The value added they can provide to portfolio firms is also contingent on the characteristics of these firms (e.g. MacMillan et al., 1989, Sapienza and Timmons, 1989 and Sapienza et al., 1996). An initial attempt to consider the heterogeneity of firms and VC investors in modelling matching is offered by Sørensen (2007). More theoretical work along these lines is needed to gain a better understanding of the determinants of the growth of NTBFs.