Show Me the Right Stuff: Signals for High Tech Startups
AbstractWe present a theoretical model of startup signaling with multiple signals and potential dierences in external investor preferences. For a novel sample of technology incubator startups, we empirically examine the use of patents and founder, friends, and family (FFF) money as such signals, nding that they are jointly endogenous to venture capital and business angel investment in the startups. For this sample, venture capitalists appear to value patents more highly than FFF money, while the reverse is true for business angels. Moreover, the impact of patents on venture capitalists is larger than the impact of FFF money on business angels.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17050.
Date of creation: May 2011
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Find related papers by JEL classification:
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-05-24 (All new papers)
- NEP-CFN-2011-05-24 (Corporate Finance)
- NEP-CTA-2011-05-24 (Contract Theory & Applications)
- NEP-ENT-2011-05-24 (Entrepreneurship)
- NEP-INO-2011-05-24 (Innovation)
- NEP-IPR-2011-05-24 (Intellectual Property Rights)
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- Ashish Arora & Marco Ceccagnoli, 2006. "Patent Protection, Complementary Assets, and Firms' Incentives for Technology Licensing," Management Science, INFORMS, vol. 52(2), pages 293-308, February.
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