Do employees gain career benefits by engaging in entrepreneurial behaviors? Drawing on signaling theory, we propose that exhibiting entrepreneurial behaviors offers tangible career benefits (i.e., more promotions and greater total compensation) to the extent that employees start new internal ventures on behalf of, or sanctioned by, their organizations. New venture creation is key to career success because it serves as a credible signal to corporate managers of an employee’s underlying leadership potential. To test this idea, we conducted two complementary studies. In Study 1 with 643 working professionals, our results show that employees who exhibit higher levels of entrepreneurial behaviors are more likely to found new internal ventures, which subsequently results in more promotions and—in larger organizations—higher compensation. In Study 2, we used a within-subject design to further isolate the signaling effect of new venture creation. Our findings indicate that corporate entrepreneurs are viewed by practicing managers as more desirable candidates for promotion. Taken together, these results shed light on the mechanism through which entrepreneurial behaviors offer employees career benefits and a boundary condition of this relationship.
