Parent firm effects on founder turnover: parent success, founder legitimacy, and founder tenure

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Abstract

Empirical studies examining new ventures have demonstrated a significant degree of founder turnover after start-up as founders are replaced by ‘professional’ managers. We examine how founders' past experience in their prior employer (their parent firm) affects their tenure in the new venture. Founders coming from more successful parent firms, with more prior affiliations among the venture's cofounders and with prior start-up experience are more likely to remain with the new venture after founding. These effects are more pronounced in cases where the technologies employed by the start-up are more uncertain. Copyright © 2010 Strategic Management Society.

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