TY - JOUR
T1 - Signaling for more money
T2 - The roles of founders’ human capital and investor prominence in resource acquisition across different stages of firm development
AU - Ko, Eun Jeong
AU - McKelvie, Alexander
N1 - Publisher Copyright:
© 2018 Elsevier Inc.
PY - 2018/7
Y1 - 2018/7
N2 - We use signaling theory to explain how new ventures effectively signal future prospects to acquire external resources. Based on a sample of 235 new ventures drawn from a unique dataset combining multiple sources, we examine the signals of founders’ human capital (i.e., education, industry experience, and founding experience) and investor prominence and their influence on the amount of external funding received across two stages of venture funding. We find that founders’ founding experience and education have the greatest effects for acquiring first-round financing, but in later stages, only the signaling effect from education remains. Furthermore, we find important interactions between founders’ human capital and investor prominence in the second round of funding. By utilizing lagged funding information, we show that different types of signals have a dynamic and temporal impact on new ventures’ resource acquisition, including the persistence of some signals and the temporariness of others.
AB - We use signaling theory to explain how new ventures effectively signal future prospects to acquire external resources. Based on a sample of 235 new ventures drawn from a unique dataset combining multiple sources, we examine the signals of founders’ human capital (i.e., education, industry experience, and founding experience) and investor prominence and their influence on the amount of external funding received across two stages of venture funding. We find that founders’ founding experience and education have the greatest effects for acquiring first-round financing, but in later stages, only the signaling effect from education remains. Furthermore, we find important interactions between founders’ human capital and investor prominence in the second round of funding. By utilizing lagged funding information, we show that different types of signals have a dynamic and temporal impact on new ventures’ resource acquisition, including the persistence of some signals and the temporariness of others.
KW - Endorsement
KW - Human capital
KW - Investor prominence
KW - Resource acquisition
KW - Signal
UR - http://www.scopus.com/inward/record.url?scp=85044287030&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85044287030&partnerID=8YFLogxK
U2 - 10.1016/j.jbusvent.2018.03.001
DO - 10.1016/j.jbusvent.2018.03.001
M3 - Article
AN - SCOPUS:85044287030
SN - 0883-9026
VL - 33
SP - 438
EP - 454
JO - Journal of Business Venturing
JF - Journal of Business Venturing
IS - 4
ER -