Homophily, Information Asymmetry and Performance in the Angels Market
@article{Venugopal2017HomophilyIA, title={Homophily, Information Asymmetry and Performance in the Angels Market}, author={Buvaneshwaran Gokul Venugopal}, journal={Econometric Modeling: Corporate Finance \& Governance eJournal}, year={2017} }
Using unique hand-collected data on startups that were seed-funded by individual angel investors, I show that social connections between angels and entrepreneurs, obtained via schools, past employment and ethnicity, positively influence investment decisions of angels, and the subsequent performance of startups. Social connections, irrespective of the ranking of the school or employer they were formed, are crucial for obtaining early-stage startup financing particularly in markets with higher…
10 Citations
Brokered Startup Financing
- Business, Economics
- 2020
I study broker intermediation in entrepreneurial financing. Brokers intermediate 15% of startup offerings, but 20% of these brokers are unregistered "finders." Issuers using finders are 30% and 20%…
The impact of hiring local managers on foreign venture capital performance: evidence from China
- BusinessInternational Journal of Managerial Finance
- 2022
PurposeThis study examines whether recruitment of local managers helps foreign venture capital (VC) firms mitigate the liability of foreignness measured by cultural differences and improves their…
Outside Directors at Early-Stage Startups
- BusinessSSRN Electronic Journal
- 2019
We document substantial variation across startups in whether and when they appoint outside directors, and the type of directors they appoint. The startup-director match depends on professional…
Brokered Private Placements: The Next Apple--Or The Next Debacle?
- Economics, BusinessSSRN Electronic Journal
- 2019
Focusing on equity offerings by small private firms, I test whether broker intermediation mitigates adverse selection costs when investors are also uncertain about broker quality. After accounting…
Essays in empirical corporate finance
- Business, Economics
- 2018
This thesis explores three topics in empirical corporate finance. The first chapter examines the cross-border private equity buyout performance. The second chapter investigates social ties and…
Progress or pinkwashing: who benefits from digital women-focused capital funds?
- Economics
- 2019
Abstract This paper examines the positioning of gender within women-focused capital funds (WFCFs) to consider the extent to which these digitally enabled sources of finance reflect the tenets of…
The association between cost-standard setting and work performance: The role of information asymmetry and goal complexity
- BusinessAccounting
- 2021
The influence of IA and GC confirms the strong association between the independent variable (PSS) on the dependent variable (WP), and shows a significant direct effect of PSS on WP.
The Role of Ethical Standards in the Relationship Between Religious Social Norms and M&A Announcement Returns
- Business
- 2019
Prior studies suggest that firms headquartered in areas with strong religious social norms have higher ethical standards. In this study, we examine whether the ethical standards associated with local…
The Secret Lives of Names?: Name Embeddings from Social Media
- Computer ScienceKDD
- 2019
It is argued that Twitter embeddings have two key advantages: (i) they can and will be publicly released to support research community, and (ii) even with a smaller training corpus, Twitterembeddings achieve similar performances on multiple tasks comparing to email embeddins.
References
SHOWING 1-10 OF 51 REFERENCES
How Do Investors Accumulate Network Capital? Evidence from Angel Networks
- Business, Economics
- 2016
We use the angel investor market to examine the effect of performance on the network connectedness of individual angel investors. We collect data on start-ups and angel investors from CrunchBase, the…
The Globalization of Angel Investments: Evidence Across Countries
- Economics, Business
- 2015
This paper examines investments made by 13 angel groups across 21 countries. We compare applicants just above and below the funding cutoff and find that these angel investors have a positive impact…
Manager Networks and Coordination of Effort: Evidence from Venture Capital Syndication
- Business
- 2013
I explore whether educational connections between managers of venture capital (VC) firms can alleviate coordination costs, and thereby enhance collaboration, when engaging in economic ties with other…
Angels and Venture Capitalists: Complements or Substitutes?
- Economics
- 2019
Understanding an entrepreneurial finance ecosystem requires an appreciation of how different investors interact with each other. Angels and venture capitalists constitute two very important investors…
Judging Borrowers by the Company They Keep: Friendship Networks and Information Asymmetry in Online Peer-to-Peer Lending
- EconomicsManag. Sci.
- 2013
It is found that the online friendships of borrowers act as signals of credit quality and increase the probability of successful funding, lower interest rates on funded loans, and are associated with lower ex post default rates.
Friends or Foes: The Interrelationship between Angel and Venture Capital Markets
- Economics, Business
- 2014
This paper develops a theory of how angel and venture capital markets interact. Entrepreneurs first receive angel then venture capital funding. The two investor types are ‘friends’ in that they rely…
Angels or Sharks? The Role of Personal Characteristics in Angel Investment Decisions
- Business, Economics
- 2017
We use actual negotiations between angel investors and entrepreneurs to study the impact of personal characteristics on investment outcomes. We construct a unique data set with 707 investment…
The Consequences of Entrepreneurial Finance: Evidence from Angel Financings
- Economics
- 2014
This article documents the fact that ventures funded by two successful angel groups experience superior outcomes to rejected ventures: They have improved survival, exits, employment, patenting, Web…
How Smart is Smart Money? A Two-Sided Matching Model of Venture Capital
- Economics
- 2006
I find that companies funded by more experienced VCs are more likely to go public. This follows both from the direct influence of more experienced VCs and from sorting in the market, which leads…
The Importance of Angel Investing in Financing the Growth of Entrepreneurial Ventures
- Business
- 2012
Investigation of the role of angel investing in financing private businesses in the US is important. Many observers consider angel investments to be one of the key drivers behind the startup and…