Failing Just Fine: Assessing Careers of Venture Capital-backed Entrepreneurs Via a Non-Wage Measure
This paper proposes a non-pecuniary measure of career achievement, Seniority. Based on a database of over 5 million resumes, this metric exploits the variation in job titles and how long they take to attain. When non-monetary factors influence career choice, inference benefits from the use of non-wage measures, such as seniority. We apply it to study labor market outcomes of VC-backed entrepreneurs. Would-be founders experience accelerated career trajectories prior to founding, significantly outperforming graduates of same-tier colleges with similar first jobs. After exiting their start-ups, they obtain jobs about three years more senior than their right-before-founding peers. Even failed founders land jobs with higher seniority than those attained by their peers in the meantime.
We thank Christian Miller for his outstanding research assistance. We also thank seminar participants at Harvard Business School for helpful comments. Gompers has consulted to general partners and limited partners investing in venture capital. Gompers received research support from the Division of Research, Harvard Business School. The views expressed in this paper are solely those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Philadelphia, the Federal Reserve Board, or the Federal Reserve System. Any errors or omissions are the responsibility of the authors. No statements here should be treated as legal or investment advice. All data used in this work are licensed through Harvard University The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.