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Is it Just the Idea that Matters ? A Randomized Field Experiment on Early Stage Investments
| Content Provider | Semantic Scholar |
|---|---|
| Author | Bernstein, Shai Korteweg, Arthur G. Laws, Kevin J. |
| Copyright Year | 2014 |
| Abstract | Which start-up characteristics are most important to investors in early-stage firms? This paper uses a randomized field experiment involving 4,500 active, high-profile, early stage investors, implemented through AngelList, an online platform that matches investors with start-ups that are seeking capital. The experiment randomizes investors’ information sets on “featured” start-ups through the use of nearly 17,000 emails. Investors respond strongly to information about the founding team, whereas they do not respond to information about either firm traction or existing lead investors. This result is driven by the most experienced and successful investors. The least experienced investors respond to all categories of information. The results suggest that, conditional on the quality of the idea, information about human assets is highly important for the success of early stage firms. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.anderson.ucla.edu/Documents/areas/fac/finance/AL_Feb2014.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
