Will Drover

The Effects of Perceived Control on Venture Capitalist Investment Decisions: A Configurational Perspective

Drawing on agency and configurations theories, this study examines how perceived level of control over the entrepreneur influences venture capitalist (VC) decision making. We model the direct effects of perceived control and the interactive effects of control with entrepreneurial prestige and opportunity attractiveness to determine how various combinations of factors influence VCs’ willingness to invest. We test our conceptualizations using conjoint analyses of 552 VC investment decisions. The results show that perceived control is directly related to investment likelihood, but different configurations of control, entrepreneur prestige, and opportunity attractiveness result in different outcomes. Our findings support a configurational perspective of VC decision making.

A Review and Road Map of Entrepreneurial Equity Financing Research

Equity financing in entrepreneurship primarily includes venture capital, corporate venture capital, angel investment, crowdfunding, and accelerators. We take stock of venture financing research to date with two main objectives: (a) to integrate, organize, and assess the large and disparate literature on venture financing; and (b) to identify key considerations relevant for the domain of venture financing moving forward. The net effect is that organizing and assessing existing research in venture financing will assist in launching meaningful, theory-driven research as existing funding models evolve and emerging funding models forge new frontiers.

Attributes of Angel and Crowdfunded Investments as Determinants of VC Screening Decisions

This research explores whether relationships between young firms and certain early–stage seed funders portray certification effects that influence venture capitalist (VC) screening decisions. Specifically, we analyze how varying attributes of angel and crowdfunded investments certify venture quality in the minds of VCs as they make due diligence screening decisions. Results from two experiments utilizing 104 VCs making 1,036 screening decisions demonstrate that the heterogeneous nature of the attributes of angels and the crowd can produce highly influential certification effects.

TOWARD A COGNITIVE VIEW OF SIGNALING THEORY: INDIVIDUAL ATTENTION AND SIGNAL SET INTERPRETATION

Research on organizational signaling tends to focus on the effects of isolated or congruent signals, assuming highly rational responses to those signals. In this study, we theorize about the cognitive processes associated with the attention paid to and interpretation of multiple, often incongruent signals that organizations send to consumers, financiers, and other stakeholders who make organizational assessments. Contributing a cognitive perspective of signal attention and interpretation, alongside the introduction of signal sets, we provide a more complete picture of how organizational signaling unfolds in the field. Our research opens new frontiers for future inquiry into the cognitive foundations of signal attention, multi-signal interpretation, and incongruent signals. This article is protected by copyright. All rights reserved.