PassionIT News

In August, mega venture capital firm Andreessen Horowitz announced a $350 million investment in residential real estate company Flow—the single largest investment the VC titan had ever made.

But a bigger surprise than the investment amount was the person who received it: Adam Neumann, the charismatic but controversial cofounder of WeWork, who quit as CEO in 2019 after a bungled initial public offering amid questions about his business practices.

Why would the VC firm risk supporting an entrepreneur with a questionable track record? A recent paper might contain the answer. Entrepreneurs coming off an initial VC-backed failure often see their careers accelerate in their follow-on job, as highlighted in “Failing Just Fine: Assessing Careers of Venture Capital-Backed Entrepreneurs Via a Non-Wage Measure.”

After exiting their startups, these entrepreneurs obtain jobs about three years more senior than their peers, according to the research. The findings suggest that companies value the experience of entrepreneurs, who often have their hands in most aspects of the firm: operations, marketing, finance, communications, and product development. Clearly, general management skills win the day, says one of the paper’s coauthors, Paul A. Gompers, who is the Eugene Holman Professor of Business Administration at Harvard Business School.

https://hbswk.hbs.edu/item/why-a-failed-startup-might-be-good-for-your-career-after-all