Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 277: A little bit of knowledge is a dangerous thing: Entrepreneurial experience and new venture disengagement

Rasmus Vendler Toft-Kehler (), Karl Wennberg () and Philip Kim ()
Additional contact information
Rasmus Vendler Toft-Kehler: Copenhagen Business School, Postal: Copenhagen Business School, Kilevej 14a, 2000 Frederiksberg, Denmark
Karl Wennberg: The Ratio Institute and Linköping University, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Philip Kim: Babson College, Postal: Babson College, Arthur M. Blank Center for Entrepreneurship, 231 Forest Street, Babson Park, MA 02457

Abstract: Existing research has offered conflicting narratives of how entrepreneurial experience influences whether founders will continue working on or disengage from their ventures. We theorize and test how entrepreneurs with varying levels of experience disengage from early-stage companies. Findings reveal a U-shaped relationship, such that novices and highly experienced entrepreneurs are more likely to quit their ventures, while moderately experienced entrepreneurs are more likely to persist in their pursuits. We offer both theoretical and empirical explanations for how the propensity to disengage from new ventures evolves with entrepreneurial experience.

Keywords: Serial entrepreneurship; Disengagement; Experience curves; Entrepreneurial behavior

JEL-codes: L26; M13

12 pages, November 21, 2016

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