No 2020/9 Does the Timing of integrating new Skills affect Start-up Growth?

Abstract

Growth often requires start-ups to recruit new skills not present in the founding team. We analyze if the relationship between integrating new skills and growth depends on timing. Should new skills be recruited as early as possible, or can start-ups add them as needed along the way? Using a unique panel dataset covering Sweden’s population of start-ups from 1997-2012, our analysis shows that i) start-ups grow faster if they integrate novel skills early in their life, while adding novel skills later reduces growth, and ii) corporate spin-offs profit less from recruiting novel skills than de novo start-ups. We mirror our results against existing theories and develop theoretical perspectives for future research.