As research has been able to demonstrate, organization-level entrepreneurship can be influenced not only by the nature of human resources but also by a large number of HRM-related policies and practices. For instance, poorly designed compensation and performance appraisal systems constrain entrepreneurial behavior in established firms (Balkin & Logan, 1988). Moreover, human resource management can help entrepreneurs to build a viable business model and secure their organic development (Chandler & McEvoy, 2000). Therefore, the acquisition and management of the human resources is a very important domain in the discovery and exploitation of entrepreneurial opportunities leading to innovation. A firm’s ability to develop new products is inextricably linked to the way in which it organizes its human resources (Laursen, 2002). Human resource management assists firms to implement their knowledge strategies to generate innovations (Michie & Sheehan, 1999; Shadur & Snell, 2002). As small, newly formed firms usually work in a less planned, less-formalized way and cannot afford to establish separate research and/or development departments, any development, acquisition or transformation of new knowledge in start-ups depends heavily on human resources and the way in which these are managed (Hayton, 2003; Sundbo, 1999). The more intense the management of employee human resources is developed in the firm, the stronger its effect on innovation. Hence the following research hypothesis: