Author Abstract
Attracting talent is widely believed to be critical to the success of a startup. In this paper, we investigate whether potential employee interest in a startup is affected by venture capital funding. We do so by analyzing a field experiment conducted on Angel-List Talent, a large online search platform for startup jobs. In the experiment, whether a startup was funded by top-tier VCs and/or whether it was funded recently is randomly highlighted in search results. We find that the same startup receives significantly more interest from potential employees when the fact that it was funded by a top-tier VC is highlighted. In contrast, highlighting the fact that a startup was funded recently has no effect. High-quality job candidates care the most about the identities of startup investors. The results provide direct evidence of the certification role played by VCs and their impact on the labor market.
Paper Information
- Full Working Paper Text
- Working Paper Publication Date: October 2020
- HBS Working Paper Number: HBS Working Paper 21-049
- Faculty Unit(s): Entrepreneurial Management