Startups That Seek to “Disrupt” Get More Funding Than Those That Seek to “Build”

Entrepreneurs often evoke “disruptive innovation” when launching products, raising funds, unveiling strategies, hiring teams, and engaging partners. Yet little is known about how entrepreneurs are integrating the concept into their identities and what consequences this has for their startups. An analysis characterizes entrepreneurs’ identities according to whether or not they referred to themselves and their startups using the language of disruption, and then looks at how this affected their ability to attract and retain two types of critical resources: financial and human capital. The data revealed two distinct entrepreneurial archetypes: those who described themselves as “disrupters” and those who considered themselves “builders.” And while builder-led startups were nearly ten times more common than disrupter-led ones, disrupter startups received 1.7 times more funding, on average, than builder startups. But builders exhibited 8 months of higher average employee tenure than disrupters.