Learning to Launch

We document that “pedigreed” entrepreneurs, those with prior work experience at large, public firms, create startups that outperform. We link startup financial and real outcomes to founders’ employment histories by combining LinkedIn profiles with VentureXpert startup data. Our sample contains 10,142 startups total, of which 6,410 were founded by pedigreed entrepreneurs. Pedigreed startups secure more financing rounds, raise larger amounts of financing, scale their workforce faster, file more patents, and have better exits. We employ a novel instrument based on M&A activity to instrument for founder pedigree and estimate the causal impact of pedigree on startup performance. We find evidence that this outperformance is consistent with investors viewing the founding team’s pedigree as a signal of domain knowledge, rather than general quality.