سرمایه انسانی موسس ، سرمایه گذاری خارجی، و بقای سرمایه گذاری جدید با تکنولوژی پیشرفته

The effect of founder characteristics in attracting external investment and enhancing survival of new high-technology ventures is explored using human capital theory and signalling theory. We test the effect of founder characteristics on external investment in and survival of new high-technology ventures by tracking a random sample of 193 high-technology start-ups, all participants in the Israeli Technology Incubator Program. Founder's business management expertise and academic status attracted external investment, but founder's general technological expertise did not. Founder's business management expertise and general technological expertise positively affected venture survival, but founder's academic status did not. Possible implications for entrepreneurs, investors, policy and further research are discussed.

High-technology new ventures are an important means for the commercialisation of new technological discoveries. Often, such ventures introduce disruptive technologies and perform the role of Schumpeterian entrepreneurship, or “creative destruction”, in the economy (Timmons and Bygrave, 1986, p. 162). In seeking to commercialise new technologies, however, these ventures find it difficult to obtain funding from the banking system to advance sufficient finance to fund market and organisational expansion (Colombo and Grilli, 2007 and Peneder, 2008). Venture capital (VC) is a possible solution to this problem (Gompers and Lerner, 2001 and Colombo and Grilli, 2009). Understanding what influences survival and growth of new high-technology ventures is of policy interest because of the role such firms play in innovation (Krabel and Mueller, 2009). There is considerable interest among governments worldwide in encouraging the growth of high-technology, venture capital-backed ventures (Lerner, 2009). While there is a considerable literature on factors affecting survival of new firms, relatively few of these focus on high-technology-based new ventures, and even fewer studies focus on the individual founders of such ventures (Colombo and Grilli, 2009 and Krabel and Mueller, 2009). Previous studies on the effect of human capital on survival have often employed an insufficient range of types of human capital or inappropriate proxies (Gimmon and Levie, 2009). Previous studies that have considered human capital effects on external investment tend to have been conducted by asking investors what they look for (e.g. MacMillan et al., 1985, Hall and Hofer, 1993 and Levie and Gimmon, 2008). Because investors do not always make decisions in the way they think they do (Shepherd, 1999), observing their actual investment decisions might yield more accurate results than asking investors what they look for (Zacharakis and Shepherd, 2001 and Kaplan and Strömberg, 2004). Our study employs insights from human capital theory and signalling theory to address the research question “to what extent does the human capital of founders of new high-technology ventures attract external investors and facilitate survival?” We use human capital theory (Becker, 1993, Piazza-Georgi, 2002 and Lazear, 2004) and signalling theory (Spence, 1973, Spence, 1974, Podolny, 1993 and Podolny, 2005) to develop hypotheses that predict the effect of different human capital factors on funding and on survival of new high-technology ventures. We then test these hypotheses using a unique longitudinal database of 193 new high-technology ventures, representing a 30% sample of all ventures incubated in the Israeli Technology Incubator Program that started between 1991 and 2001. This research setting controls for a range of variables, enabling us to home in on human capital and signalling effects on external investment and survival. All founders in our sample were first time founders, and all were required to seek external funding. This was a requirement of entry to the incubator program, which provided initial funding and advice to all founders. This enables us to control for previous founding experience, which is a very strong signal for many funders (Hsu, 2007), and to select a sample of new high-technology ventures all of whom were in the same market for funding. In human capital terms, prospective investors were left with a choice of general human capital signals, such as level of education, or specific human capital signals, such as relevant business management expertise or technological expertise. Our research design enables us to uncover which of these forms of human capital were employed as attractive signals by investors and which affected survival. Forty-one percent of this sample obtained funding from external investors up to 2001. By late 2003, only 40% of the sample were still active, with an additional 26% in a state of suspended animation and the rest (34%) closed for good. Controlling for a range of other factors, including industry sector, incubator location, and technology commercialisation strategies, we find that investors selected on business management expertise and academic status but not on founder's technological expertise. Founder's technological expertise and business management expertise positively affected survival but founder's academic status did not. The effect of external investment on survival was marginally significant. In the following sections we review the literature on factors affecting new venture survival, attraction of external investment, and the effect of external investment on new venture survival. We describe a simple theoretical model of founder's human capital, investment and venture survival and deduce a core set of hypotheses. We describe the research method, sample, and variables used to test the hypotheses. Results of multivariate logistic regressions of external investment and venture survival as alternative dependent variables against an identical set of independent human capital and control variables are then reported. We also report the reflections of four different experienced investors on our results. We conclude by noting the implications for entrepreneurs, investors, researchers and policymakers and the limitations of our research.

Our findings contribute to the literature on the effect of founder's human capital on external investment in and survival of new technology-based ventures in several respects. First, they appear to support competence-based human capital theories of founder's human capital and venture performance (Becker, 1993, Cooper and Bruno, 1977, Piazza-Georgi, 2002 and Schumpeter, 1942). In our sample, relevant measures of human capital, such as in this case, having had P&L responsibility in a business and having a technological background, had significant independent effects on survival, while personal indices such as age, gender and origin which have been used in the past as human capital proxies, did not. Second, we contribute to the literature on signalling in the context of external investment. Our results appear to support theories of signalling and asymmetric information (Podolny, 1993, Podolny, 1994, Podolny, 2005 and Spence, 1974), as applied in external investment (Busenitz et al., 2005 and Mason and Stark, 2004). To be effective, a signal of human capital must be able to indicate differences among very competent and less competent resources (Busenitz et al., 2005). Unfortunately, it is much easier to observe personal indices or status symbols than Spencian signals of human capital such as expertise or type of education. Thus it may be tempting, in making investment decisions under imperfect information and under time pressure, to use status symbols as proxies for instrumental (useful) human capital factors. This may be particularly likely when the relevant human capital is specific, complex and rare, and if few people are capable of assessing it (Podolny, 2005). We suggest that our findings are an illustration of this issue. Our interviews with investors provide some face validity to our findings. All the interviewees acknowledged that investors make decisions intuitively and are subject to heuristics and biases, in line with Zacharakis and Shepherd (2001), and recognised a discrepancy between their ‘espoused’ versus their ‘in use’ evaluation criteria, supporting Shepherd (1999). Interviewee no. 1 noted that due diligence “should” diminish the effect of academic status. This view chimes with the argument of Busenitz et al. (2004) that VCs’ close participations with their ventures reduce information asymmetry that may exist with the founders; it also suggests that due diligence was not being thoroughly carried out by external investors at this time. It could be argued that investors do not select on the grounds of factors affecting early survival, but on potential for high growth and expected value at exit (Baum and Silverman, 2004). By the time of exit, the founder may no longer be running the venture, and the technology the venture started with may well have been superseded. While we agree with this view, we also recognise that if ventures are to have any chance of later success, they must survive the early years. Therefore investors might gain from selecting both on the basis of future exit value potential and short-term survival potential. Indeed, they do this already by choosing ventures with early sales (MacMillan et al., 1987). But they could also consider technical expertise as well as business management expertise of the founder. While its importance is likely to diminish over time as technology advances and other staff take on technology roles in the venture (Kaplan et al., 2009), it appears to be a critical survival factor in a venture's early stages. Our findings may be of value to entrepreneurs because they show the value of different forms of human capital to performance. The optimal combinations of human capital seen here, of both technological background and business management, were present in only 25% of our sample. Even rarer might be the combination, in one person, of an understanding of how to make a technology work and an understanding of pain in a market that could be eased by the benefits that that technology might offer. The ventures in the sample were typically founded by solo entrepreneurs. By starting with a balanced team, founders can avoid the Lazearian imperative of being a “jack of all trades”. It may be no coincidence that the survival rate for the ventures in this sample, at 40% by the second sampling period, is relatively low (Bruno and Cooper, 1982 and Roberts, 1991, p. 252; Cowling et al., 2006 and Schwartz, 2009). A challenge for policymakers is how to decrease the inefficient matching process between funders and new technology-based firms and the imperfections in the capital market (e.g. Colombo and Grilli, 2005 and Colombo and Grilli, 2009). In the case of Israel in the late 1990s, the comparative inexperience of many investors (Chorev and Anderson, 2006) may have contributed to their attraction to academic status but not to technological expertise. Governments of countries currently undergoing rapid growth of a new venture capital industry could learn from this experience. They could, for example, encourage investors to learn from more experienced investors, and from research findings (Lerner, 2009). Our finding that academic status made no significant difference to venture survival informs the emerging field of study of “academic” entrepreneurs (Corolleur et al., 2004 and Lacetera, 2009). This is an area of increasing research and policy interest (Etzkowitz, 2003, Nelson, 2004, Krabel and Mueller, 2009, Gilsing et al., 2010 and Roach and Sauermann, 2010). Of course, those who have spent much of their career in academia are less likely to have substantial business management experience, as our own data in Table 3 indicate. However, our results suggest it is important for investors and researchers to consider the different aspects of a founder's human capital, and not to take one aspect as a signal of the presence or absence of another. Repeated sampling of this cohort over time could test if different founders’ human capital factors and technology commercialisation strategies affect longer term performance, including value at exit, or if the same founders’ human capital factors explain more or less of the variance in performance. A limitation of this study is that it ignored founder's social capital. While this factor is less likely to vary for ventures nurtured in a specialist incubator program, founder's social capital does affect a venture's funding chances (Greene et al., 1999 and Honig et al., 2006). Further research could tease out signals of social capital factors such as reputation (Harrison et al., 2004), for example, whether academic institutional prestige moderated the academic status effect on external investment. Two human capital factors that featured in empirical studies summarised in Table 1 were omitted from our research design: entrepreneurial mindset and learning ability. These are complex constructs that were not measured in the first survey; they may or may not have affected our results. Recent work by Baumol et al. (2009) casts doubt on the proposition that high levels of technical education affects entrepreneurial mindset and learning ability, so we have no reason to suppose that these unobserved characteristics are driving our results. However, future studies should take these constructs into account.