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  • Publication
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    Money talks: The impact of investors’ networks on entrepreneurs’ success
    This paper analyzes the role of investors’ network centrality on the company in which they are investing. Our longitudinal (19682020, across industries) study shows that an investor with a central network position is beneficial for entrepreneurs, both preIPO and postIPO. We find that an investor with a central network position increases the likelihood that the investee will obtain subsequent funding, go public, and perform in the long term. We also show that to go public, the startup ideally first needs funding from a central investor – which could even come at the expense of receiving a higher amount from a less central investor – before broadening its investor base to include more investors as it moves toward exit via IPO. We further examine the effect of investor centrality on startup valuation at the time of the IPO and the firm’s short and long term success.
  • Publication
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    Money talks: Empirical insights on the impact of investors’ connections for entrepreneurs’ success
    An important asset for the investor and the company he is investing in are the con- nections that he may have in the industry. It makes for a pool of resources comprised of person/companies he might know or might have worked with, which may prove valuable in the future. The study of the impact of these connections on a company is the subject of my work. It can be rephrased in this fashion: what is the impact of an investor’s connections for the company in which he is investing? My answer to this question is built by viewing a complete network of past relation- ships from all investors. According to this knowledge of previous business links, I investigate the role that the centrality of an investor within the global network can have for his investee. The question can further be broken down to several sub questions. Does invest- ment from a prominent investor at an early stage increase the chances of its investee to secure later successful rounds of funding? And can a favourable network position of an investor increase the odds that a startup will become public?