From Founders’ Knowledge to Economic Value Capture in Academic and Employee Startups

Economic value capture is crucial for entrepreneurial startups, as it conditions the commercial viability of the technological opportunities underlying their founding. Startups vary in whether they capture value, and if so, whether through markets for product or technology. This study posits that value capture hinges on founders’ knowledge accumulated in their prior employment context, separating founders as academic scientists and ex-employees of industry firms. Academic founders bring scientific knowledge from universities and within-industry employee founders carry industry-specific knowledge from their former employer. These differences provide the theoretical basis that the study empirically explores in U.S. medical device startups. Academic startups tend to capture value in markets for technology, whereas within-industry employee startups tend to capture value in markets for product. Further, variations in founders’ history and employment context can bridge scientific and commercial dimensions in knowledge profiles within academic and employee startups, shifting the resulting value capture pathway toward pioneering products.