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Understanding The Consequences of Founders' Experience*
Scholars and practitioners often assess the value of founders' experience based on the "stock" of experiences accumulated at a point in time. A complementary view is to assess founders ' experience as a
"stream" which changes within given time periods. The theoretical and practical implications of these vie points are explored here.
The kinds of experience that founders bring into a business has received attention from researchers who are attempting to explain why certain business founders are more successful than others. If certain kinds of experience are found to be predictive of firm performance, they could be used as criteria in evaluating business plans or loan applications and as the basis for tailoring development, incubation, and educational programs. In addition, prospective business owners would have some criteria against which to assess their own readiness for start-up, to identify areas in which they might want to gain further experience, or to gain insights into ways to capitalize on the experience they do have, such as entering particular industries.
Reviews of the literature on founders' experience (for example, Reuber, Dyke, and Fischer 1990; Reuber and Fischer 1994) indicate that no consistent, direct relationship between the experience of the founder, owner, or management team of a venture on the one hand, and the venture's success on the other, have been found. As a group, the studies are fragmented and inconclusive. Across different studies, there is a wide variety in the measures of experience and outcomes, in the moderating, mediating and control variahles used, and in the range of values placed on particular kinds of experience (Reuber and Fischer 1994). However, knowledgeable practitioners, such as venture capitalists, seem to believe that founders' experience is important to the success of a new venture (Goslin and Barge 1986 MacMillan, Siegel, and SubbaNarasimha 1985; Riquelme and Rickards 19')2). Furthermore, even researchers who do not find a relationship between founders' experience and venture performance are hesitant to conclude that experience, or lack of experience, is inconsequential (see, for example, Roure and Keeley 1990, Sandberg and Hofer 1987). Thus, while we recognize that many factors will impact venture performance (Baum 1995; Hlerron and Robinson 1993; Keeley and Roure 1990; Roure and Keeley 1990; Sandberg and...