Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary By randomising the information sent to potential investors on AngelList over e-mail, this experiment finds evidence that the founding team of a startup has strong influence over the investor's decision to invest. A brief description of the project's goals and its current state Abstract <p>This paper uses a randomized field experiment to identify which start-up characteristics are most important to investors in early stage firms. The experiment randomizes investors’ information sets of fund-raising start-ups. The average investor responds strongly to information about the founding team, but not to firm traction or existing lead investors. In contrast, inexperienced investors respond to all information categories. Our results suggest that information about human assets is causally important for the funding of early stage firms, and hence, for entrepreneurial success.</p> The full abstract of the study, if available Links http://dx.doi.org/10.2139/ssrn.2432044 Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Which elements are most important in the investment decision process of early stage investors? Sample Trial population and sample selection Takes place on AngelList (online platform that matches startups with investors). A correspondence methodology is used. Number of treatment groups Size of treatment groups N/A Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Featured emails about startups in AngelList that are sent out to investors were varied. The researchers randomly chose which of the team, current investors, or traction categories were shown in each email. Researchers investigate the investors' responses to the emails using buttons included in the emails. Rounds of data collection Baseline data collection and method Baseline data was collected from the AngelList database containing information profiles on active investors and startups. Investor information includes past success signals computed by an AngelList algorithm, social network connections, number of prior investments, whether the investor is an advisor or board member, etc. Startup information includes location, sector, founder information, employee information, advisors and board, etc. Data collection method and data collected Evaluation Outcome variables <p>Investors' responses to emails using the "View" button included in each AngelList featured email.</p> Results <p>In this controlled environment, investors react most strongly to information about startups' founding team. Results suggest that investors care about strong founding teams not only for pure signaling reasons, but also because teams matter for operational reasons. The most experienced and successful investors only react to team information, suggesting that selecting on founding team information is a successful and viable investment strategy. Human capital assets are critical for the success of early stage firms.</p> Intervention costs Not available. Cost benefit ratio Reference Bernstein, S., Korteweg, A., & Laws, K., 2015. 'Attracting Early Stage Investors: Evidence from a Randomized Field Experiment'. Rock Center for Corporate Governance at Stanford University Working Paper No. 185. May. Stanford University Graduate School of Business Research Paper No. 14-17. Citation for use in academic references
