Hiring is exceptionally important and difficult in startups, and this is especially true when hiring technical employees. Entrepreneurs need technical employees to build their products, but technical individuals are often more hesitant to join startups given higher outside opportunity costs. Yet, surprisingly, little research has examined the unique factors that attract technical employees, specifically, to new ventures. In this paper, we examine whether (and why) equity ownership is more or less important for prospective technical employees as compared to prospective nontechnical employees. In our empirics, we conduct a pair of studies. In Study 1, we rely on data from a job portal run by Venture For America (VFA). In Study 2, we conduct an experiment of 994 respondents in which we randomly vary the mentioning of equity in job postings and compare the likelihood of respondents applying to the job. In both studies, we find that job postings that mention equity attract more applicants, and this effect is especially strong for technical applicants. We also find that the primary mechanism underlying this effect is an anticipated feeling of purpose. Overall, our study offers fresh contributions to the literature on human capital in entrepreneurship.
