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Abstract

This study examines the impacts of R&D on new-born startups’ revenue during the 0-3 age period, as well as investigating the moderating role of founding team human capital in the R&D-revenue relationship. The sample is from a longitudinal panel data from the Kauffman Firm Survey (KFS), including a total of 1369 technology-based startups established in year 2004 and a total of 286 founding teams. Consistent with findings of previous research, results of this study suggest that startups who engage in R&D investments and activities in gestation/initial stage of business development have significant higher likelihood of obtaining high revenue in the following two years than startups do not. Founding team’s education level and domain knowledge directly relate positively to achieve high revenue in the following years. An interesting result of the analysis shows that R&D and the domain knowledge of the founding team interact negatively when predicting revenues: greater industry/business knowledge does not enhance the advantage of R&D to the firm.

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