Venture Capital Cycles and the Startup Labor Market
I show that venture capital market shocks have real consequences for high-skill knowledge workers. Plausibly exogenous shocks to local VC increase local startup hiring but also increase startup labor turnover. Startup jobs created in hotter VC markets are shorter-lived, and workers in these jobs are more likely to leave the universe of VC-backed firms within two years. While job duration in hot markets falls across occupations, effects on career advancement differ by role: STEM workers who enter booming VC markets advance slower in seniority in the following two to five years, while Business workers are less affected. I show that differences in technology-skill specificity across occupations can explain this heterogeneity. The results indicate that shocks to risk capital can have lasting effects on knowledge worker careers.