Stakeholders play a pivotal role in supporting new ventures by providing essential financial resources, distribution channels, and human capital. Entrepreneurial hype, one of the fastest-growing research phenomena in literature, defined as a collective vision and promise of future potential, is routinely leveraged in new ventures for stakeholder enrollment. While existing research extensively explored the impact of hype on external stakeholders like investors and customers, a vital stakeholder group, early employees remained relatively understudied. In this study, we posit that hype possesses a unique appeal to early employees, distinct from other stakeholders. Early employees may be attracted to the new ventures through the hype created around leadership, culture, product and career utility. However, they may subsequently experience a gap between the perceived hype and the actual reality. To address this, our study employs psychological contract breach (PCB) theory to investigate the impact of unrealized hype on early employees’ job satisfaction, organizational commitment and turnover intentions. Furthermore, we differentiate the effects of unrealized hype between two distinct groups of early employees: those who wish to (1) become future founders, and (2) joiners, those individuals who prefer working at startups but possess no future intention to become a founder. Our study contributes to the literatures of hype and entrepreneurship by explaining the role of hype among early employees and by applying PCB theory to early employees to examine the effects of unfulfilled expectations.
