HOW DO INVESTORS EVALUATE PAST ENTREPRENEURIAL FAILURE? UNPACKING FAILURE DUE TO LACK OF SKILL VERSUS BAD LUCK

• 成果类型: Article
• 署名作者: Zunino, Diego; Dushnitsky, Gary; van Praag, Mirjam
• 署名单位: SKEMA Business School; Universite Cote d'Azur; University of London; London Business School; Copenhagen Business School
• 刊物名称: ACADEMY OF MANAGEMENT JOURNAL
• ISSN/ISSBN: 0001-4273
• DOI: 10.5465/amj.2018.0579
• 发表日期: 2022
• 页码: 1083-1109
• 关键词: venture capitalists; TIE FORMATION; Gut feel; performance; INNOVATION; INVESTMENT; RESOURCES; signals; FIRMS; CONSEQUENCES

摘要

Research has shown that most ventures fail, yet there has been limited work on investors' views of entrepreneurs who have failed in the past. We address this gap and call attention to an innate asymmetry between past failure and success. This asymmetry arises because success requires skill and luck jointly, whereas failure materializes due to either lack of skill (mistakes) or bad luck (misfortune). We ask: Are investors failure-averse and discount a failed entrepreneur even in the presence of additional information about entrepreneurial skill? Or do they make rational inferences in light of the additional skill information and proceed to fund the new startup? To test whether investors are failure-averse or engage in rational inference, we use experiments in the context of equity crowdfunding. The results suggest that prospective crowdfunding investors rationally integrate informational cues regarding past outcomes and entrepreneurial skill.