J. Daniel Kim

J. Daniel Kim and Michael J. Pergler (2025), Startup hiring through firm-driven search: Evidence from Venture for America, Strategic Management Journal, Forthcoming (). https://doi.org/10.1002/smj.3710

Abstract: Due to their limited reputation as potential employers, startups struggle to generate interest (e.g., applications) from jobseekers. To help mitigate these frictions, employers can proactively reach out to jobseekers. In this study, we examine the relationship between firm-driven search and startups' hiring and retention of young workers. Using a unique empirical setting, we find that firm-driven search is associated with a higher likelihood of hiring. However, candidates sourced through firm-driven search exhibit greater turnover rates. In exploring the underlying mechanisms, we find suggestive evidence that candidates perceive firm-driven search as a favored substitute for their search efforts. For employers, startups with lower visibility and pronounced hiring needs are most likely to engage in firm-driven search, implying that they do so despite the lower retention prospects.

J. Daniel Kim and Saerom Lee, Research: When Should Startups Scale? in Harvard Business Review (Online),.

Abstract: Silicon Valley often touts rapid scaling as the best strategy for achieving startup success. However, new research reveals that scaling early, particularly within the first 12 months, significantly raises the risk of startup failure, especially for two-sided platforms. The key takeaway for entrepreneurs: Be cautious with early scaling and prioritize a culture of experimentation. Taking a “slow-and-steady” approach to scaling may provide a more sustainable path to long-term success.

J. Daniel Kim (2024), Startup Acquisitions as a Hiring Strategy: Turnover Differences Between Acquired and Regular Hires, Strategy Science, 9 (2), pp. 118-134. https://doi.org/10.1287/stsc.2022.0026

Abstract: Prior studies suggest that acquisitions can increase employee turnover. However, acquired workers are technically new hires, who are generally prone to turnover. Therefore, it is important to benchmark acquired workers against other new hires in the organization. One view suggests that compared with regular hires who select their employer based on a mutual vetting process, acquired workers can experience a poor fit with their new employer (e.g., culture clash), resulting in elevated rates of turnover. Meanwhile, as acquisitions represent a bundle of assets, acquired workers can possess complementarities accumulated with the target firm that reinforce worker–employer fit and thus their retention prospects. Using population-level data from the United States, I find empirical support for both perspectives. Acquired workers from startups exhibit significantly higher turnover rates than regular hires. Moreover, in conditions under which acquired workers’ complementarities are more likely to be preserved—specifically, individuals with longer prior tenure, teams in which the founders remain intact, and target organizations that are structurally separated rather than integrated into the acquirer—I find reduced turnover differences for acquired workers relative to regular hires. Together, these results elucidate whether and when firms can harness human capital through startup acquisitions (“acqui-hiring”).

J. Daniel Kim and Saerom Lee (Under Review), Target Startup’s Organizational Structure and Acquirer’s Integration-Separation Decision.

Abstract: To reap the benefits of startup acquisition, acquirers strategically choose whether to integrate or separate their targets. This study examines how this post-acquisition organization design choice between integration and separation depends on the target startup's pre-acquisition organizational structure. Leveraging employee-employer-matched data to construct a novel measure of post-acquisition separation based on employee mobility patterns, we find that acquirers are more likely to separate more structurally complex target startups. Additional analyses are consistent with the view that, as the target firm's structural complexity can increase the disruptive costs of integrating the two firms but reduce coordination costs when kept separate, post-acquisition separation becomes more suitable. Our results shed light on an important organizational antecedent that shapes the relative appeal of integration versus separation in startup acquisitions.

Saerom Lee and J. Daniel Kim (2024), When Do Startups Scale? Large-scale Evidence from Job Postings, Strategic Management Journal, 45 (9), pp. 1633-1669. https://doi.org/10.1002/smj.3596

Abstract: Scaling at the right time is a crucial challenge for startups. Conceptualizing “scaling” as the entrepreneurial process of acquiring and committing resources to implement the core business idea and expand the customer base, this study examines how scaling early may decrease imitation risk at the expense of increasing commitment risk. As startups typically hire managers and sales personnel when they begin to scale, we propose that this timing can be empirically measured by when startups first post these jobs. Leveraging a dataset of job postings, we find that early scalers are more likely to fail, but no evidence of a countervailing benefit in terms of successful exit. Additional analyses suggest that the commitment risk in scaling early outweighs the benefit of reducing imitation risk.

J. Daniel Kim, The Challenge of Retaining Startup Talent After an Acquisition in Harvard Business Review (Online),.

Abstract: People are among the most prized assets of many startup companies, so when employees leave after an acquisition, it can be a substantial loss for the acquiring company. Why do so many startup employees leave, and how do startup acquisitions impact their careers? Using U.S. Census Bureau data from 1990 to 2011 that encompasses 230,000 acquired startup workers, the author researched these questions and discovered significantly higher turnover rates among acquired workers compared to regular hires. The author analyzes the causes for the disparity, examines prominent historical and recent examples of employee departure post-acquisition and what they did next, and suggests strategies to mitigate the loss of talent when companies are acquiring startups.

J. Daniel Kim, Joonkyu Choi, Nathan Goldschlag, John Haltiwanger (2024), Early Joiners and Startup Performance, Review of Economics and Statistics, Forthcoming ().

Abstract: We show that early joiners—non-founder employees in the first year of a startup—play a critical role in shaping firm performance. We use administrative employer-employee matched data on US startups and utilize premature death as a natural experiment that exogenously separates talent from startups. We find that losing an early joiner has large negative effects on employment and revenues that persist for at least ten years. In contrast, losing a later joiner yields only a small and temporary decline in firm performance. Our results imply that organization capital, an important driver of startup success, is embodied in early joiners.

J. Daniel Kim and Minjae Kim (2024), Founder Turnover and Organizational Change, Organization Science, 35 (1), pp. 259-280. https://doi.org/10.1287/orsc.2023.1668

Abstract: Why might start-ups not change even when doing so may enhance firm performance? It seems reasonable to point to founder presence as a potential culprit given founders’ cognitive myopia and/or commitment to the status quo. However, founder presence may instead be a facilitator of change in response to environmental uncertainty because founders can uniquely coordinate resources needed for organizational change. We empirically address these two opposing views on the impact of founder presence (versus loss) on organizational change by using a comprehensive administrative data set of start-ups in the United States. Correlational analysis shows that start-ups generally become less likely to change following founder turnover. Given the potentially endogenous nature of founder turnover, we exploit premature deaths as a natural experiment that suddenly removes some founders from their start-ups while leaving others intact. We find that start-ups are less likely to change after losing a founder, especially if the founder loss happens during an economic recession. At the same time, the effect is attenuated when losing a founder with more experience in the same industry, suggesting that founder presence can also contribute to reinforcing the status quo under some conditions. Broadly, these results not only show that founders tend to facilitate change in their organizations but also identify when founders are merely subject to organizations’ bureaucratic forces that they themselves may have imprinted originally.

J. Daniel Kim (2022), Startup Acquisitions, Relocation, and Employee Entrepreneurship, Strategic Management Journal, 43 (11), pp. 2189-2216.

Abstract: This study examines the impact of startup acquisition on the acquired employees’ propensity for entrepreneurship. As a new owner, the acquirer may not prioritize acquired employees’ ideas to be commercialized internally, thereby increasing the odds that they are pursued externally. Leveraging employee-employer matched data from US Census on high-tech startup acquisitions and their workforce in 1990-2011, I find that startup acquisitions substantially increase the rate of employee entrepreneurship both within and outside the target firm’s industry. Post-acquisition entrepreneurship is disproportionally concentrated among individuals with high human capital. Moreover, this effect is amplified when the target startup is relocated to the acquirer’s location, and largely muted when left in its original location. Overall, this study highlights startup acquisitions as an important organizational precursor to employee entrepreneurship.

J. Daniel Kim, Pierre Azoulay, Benjamin Jones, Javier Miranda (2022), Immigration and Entrepreneurship in the United States, American Economic Review: Insights, 4 (1), pp. 71-99.

Abstract: Immigration can expand labor supply and create greater competition for native-born workers. But immigrants may also start new firms, expanding labor demand. This paper uses U.S. administrative data and other data resources to study the role of immigrants in entrepreneurship. We ask how often immigrants start companies, how many jobs these firms create, and how these firms compare with those founded by U.S.-born individuals. A simple model provides a measurement framework for addressing the dual roles of immigrants as founders and workers. The findings suggest that immigrants act more as “job creators” than “job takers” and that non-U.S. born founders play outsized roles in U.S. high-growth entrepreneurship.