Startup Size and Pre-Entry Experience: New Evidence from Italian New Manufacturing Ventures

Abstract

The paper studies the nonlinear effects of the different types of founders' pre-entry experience on startup size. Our empirical data consists of 3,456 Italian new ventures in 20 industries. We find that the presence of industry-specific experience and entrepreneurial experience have a positive effect on startup size while generic experience does not exert any effect on startup size. Moreover, we find that industry-specific experience has positive but diminishing returns on startup size up to a point where additional amounts of experience have negative effects on startup size (inversed U-shaped relationship).