Sequence Analysis in Entrepreneurship Research: Business Founders’ Life Courses and Early-Stage Firm Survival

This paper introduces the method of sequence analysis inentrepreneurship research. Informed by life course theory, we argue thatdepending on duration and timing, human capital can depreciate during workinterruptions (such as unemployment or parental leave) but also be restored byre-entering and staying in the job market. Using data from the GermanSocio-Economic Panel, we analyse the educational and occupational lifecourses of individuals who have started a business. We investigate whetherthere are patterns in the biographies of these individuals. Exploratory analysisreveals that seven types of founders can be differentiated. In this sample,cluster 1 appeared to be most successful in terms of early-stage firm survival.Sequence analysis has proved to be a valuable method to improve theefficiency of research on the life courses of business founders. This studyinvites future research to take a deeper look at life-course-based factors ofbusiness activity and success. This paper introduces the method of sequence analysis in entrepreneurship research. Informed by life course theory, we argue that depending on duration and timing, human capital can depreciate during work interruptions (such as unemployment or parental leave) but also be restored by re-entering and staying in the job market. Using data from the German Socio-Economic Panel, we analyse the educational and occupational life courses of individuals who have started a business. We investigate whether there are patterns in the biographies of these individuals. Exploratory analysis reveals that seven types of founders can be differentiated. In this sample, cluster 1 appeared to be most successful in terms of early-stage firm survival. Sequence analysis has proved to be a valuable method to improve the efficiency of research on the life courses of business founders. This study invites future research to take a deeper look at life-course-based factors of business activity and success.