Faster financing or higher valuation: A difficult choice for the founders from good universities

Zhenyu Li, Jiawen Zhu and Gengzhong Feng

International Review of Financial Analysis, 2025, vol. 104, issue PA

Abstract: While scholars and managers agree that the alumni of universities with higher reputations exhibit better financing performance, this study challenges this rigid conclusion. We propose an innovative mechanism influencing financing valuation, encompassing both direct and mediating effects. Specifically, we discuss the impact of different decision-making methods on the signaling effect. Through a regression analysis of 328 startups in China, we ascertain that only the founders of top universities can obtain shorter financing times and higher valuations. In contrast, founders from good universities must make a trade-off between faster financing and higher valuation or, with the help of financial advisors, obtain a higher valuation. Our findings contribute to the fields of entrepreneurial financing and signaling theory.

Keywords: University reputation; Signaling theory; Financing time; Financing valuation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521925003746
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925003746

DOI: 10.1016/j.irfa.2025.104287

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().