Human capital and new venture performance: the industry choice and performance of academic entrepreneurs

New venture formation by academics has recently been recognized as an important source of knowledge spillover and technology transfer. However, the majority of studies have focused on the factors leading to academic entrepreneurship, while only few study the performance of these ventures. Moreover, this strand of the literature has focused solely on start-ups by university faculty. This study adds to these by including university graduates in the definition of academic entrepreneurs and controlling for the industry environment in which the new venture is founded; both aspects, which are recommended in recent studies. Longitudinal register data combined with responses from 1,151 first-time entrepreneurs in 2004 are used to explore the self-selection of individuals into certain industry environments and their subsequent performance-survival and growth-in the chosen environment. This study works from the hypothesis that university education (technical and non-technical) and industry experience increase new venture performance in high-profit and high-uncertainty industries, respectively, because of increased knowledge and skills; in addition, education and experience engender higher absorptive capacities and adaptability. The analysis controls for personal traits, social capital, and financial capital. Technical academics are found to perform better in both profitable and uncertain industries, whereas non-technical academics perform better only in profitable industries. Nevertheless, both types of academics are more likely to enter uncertain industries. The absorptive capacities of technical academics make these individuals particularly important in technology transfers to new ventures in unstable environments, which are important in developed economies.