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Do Startups Benefit from Their Investors’ Reputation? Evidence from a Randomized Field Experiment

Shai Bernstein, Kunal Mehta, Richard R. Townsend and Ting Xu

No 29847, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze a field experiment conducted on AngelList Talent, a large online search platform for startup jobs. In the experiment, AngelList randomly informed job seekers of whether a startup was funded by a top-tier investor and/or was funded recently. We find that the same startup receives significantly more interest when information about top-tier investors is provided. Information about recent funding has no effect. The effect of top-tier investors is not driven by low-quality candidates and is stronger for earlier-stage startups. The results show that venture capitalists can add value passively, simply by attaching their names to startups.

JEL-codes: C93 G24 J22 J24 L26 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-ban, nep-ent, nep-exp, nep-hrm, nep-lma, nep-pay and nep-sbm
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