Performance effects of luring top investors for early-stage financing
by Timo B. Johnson; Carolin Bock; Christian Fisch; Dirk Schiereck
International Journal of Entrepreneurial Venturing (IJEV), Vol. 15, No. 4, 2023

Abstract: We assess how early-stage financing affects the overall performance of start-ups. Specifically, we compare the impact of accelerator programs, business angels, venture capitalists, and non-refundable capital on the acquisition of follow-on financing and exit success. We also assess differences between top investors and other investors in the respective financing form. Based on a dataset of 81,883 start-ups, we show that both the financing form and the individual investors have significant long-term effects on performance. More specifically, the relative contribution of the financing form is strongly outweighed by the experience effects of top investors. Utilising various fixed effects and probit regression models, we demonstrate that these results are valid across financing forms and apply to both interim performance and exit success.

Online publication date: Fri, 15-Sep-2023

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