When the going gets tough, do the tough get going? The pre-entry work experience of founders and high-tech start-up survival during an industry crisis

This article explores the possibility that under an intensely negative industry-specific shock, the positive relationship between the human capital of founders and the survival prospects of start-up businesses may actually be negative. Starting from a theoretical perspective to derive testable hypotheses, the study examines a sample of 179 Italian start-ups operating in the information and communication technology services market created during the boom period from 1995 to early 2000. Econometric analyses provide evidence that, during an intense industry crisis (that is, early 2000 to 2003) entrepreneurs with a substantial amount of prior work experience may pursue an exit strategy. This also highlights the importance of distinguishing between different types of work experience and different exit routes: founding teams with highly specific work experience show a higher probability of pursuing mergers and acquisitions (M&A), while a higher level of generic work experience is found to be more conducive to firm closure.