Uncovering the effects of prior founding experience of entrepreneurs on early board selection

Abstract

Purpose - This study aims to show what type of directors founders (or entrepreneurs) first appoint to the board and how these appointments differ across experienced and novice entrepreneurs.Design/methodology/approach - The sample consists of the human capital of board members in 443 new ventures in the computer software and information technology industries between 2000 and 2014. The hypotheses were tested using tobit regression.Findings - The findings in this study reveal that compared to novice entrepreneurs, experienced entrepreneurs tend to appoint early boards with greater human capital (entrepreneurial, technical/scientific and industry-specific) and with greater functional diversity. In contrast, novice entrepreneurs tend to appoint early boards with greater finance and director experience.Originality/value - The value of this research lies in filling the gap in the current literature by comparing the board appointment/selection behavior of novice and experienced entrepreneurs, which is relatively underexplored.