Bringing Science to Market: Knowledge Foundations, Inventor-Founders, and Performance

In this paper, we examine how a startup’s knowledge foundations—embedded in its core technology—influence its performance in the exit market. Using a dataset of 1,006 biomedicine startups founded between 2005 and 2015, we focus on two key factors: (1) the degree of scientific specialization in the startup’s core technology and (2) whether the technology’s inventor is also the startup’s founder. Counterintuitively, we find that greater scientific specialization in a startup’s knowledge-base correlates with poorer exit market outcomes. Additional analyses suggest that this stems from such startups relying on narrower, less integrable technologies heavily dependent on tacit knowledge, which can hinder engagement with external stakeholders. However, the presence of an inventor-founder—an individual who invents the core technology and establishes the startup—moderates this relationship. When an inventor-founder is involved, the negative relationship with knowledge specialization is almost entirely mitigated. This suggests that inventor-founders may enhance the strategic value of specialized knowledge by making it more accessible to key stakeholders while also reinforcing its defensibility, counterbalancing its associated challenges. Interestingly, we also find that startups with an inventor-founder but without a specialized knowledge-base, or vice versa, perform worse on the exit market. These findings underscore the contingent value of knowledgebased resources in entrepreneurial contexts, emphasizing the importance of aligning knowledge characteristics with the founder to optimize firm outcomes. Our research highlights the nuanced relationship between knowledge specialization, founder roles, and startup performance, contributing to a deeper understanding of how knowledge-based resources shape firm success.