Social networks and start-up funding

Alex Annan Abakah, Gunchang Kim and Hyacinthe Yirlier Somé

Finance Research Letters, 2024, vol. 64, issue C

Abstract: This paper examines whether aggregate social networks influence start-up firms’ access to external funding. We find that start-ups in U.S. counties with higher social proximity to start-up funding (SPF) attract a larger investor base and secure more capital. The results are robust to several alternate specifications. We also show that start-ups in counties with higher SPF have high survival rates and successful exits. Our findings highlight the importance of aggregate social connections in facilitating access to early-stage funding.

Keywords: Start-up; Social connection; Start-up funding; Funding proximity (search for similar items in EconPapers)
JEL-codes: G24 M13 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:64:y:2024:i:c:s1544612324005105

DOI: 10.1016/j.frl.2024.105480

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