Change search
ReferencesLink to record
Permanent link

Direct link
A Signaling Theory Of Entrepreneurial Venture’s Valuation
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Entrepreneurship and innovation.ORCID iD: 0000-0001-9348-7505
2014 (English)In: Academy of Management. Annual Meeting Proceedings, ISSN 2151-6561, Vol. 2014, no 1Article in journal (Refereed) Published
Abstract [en]

This paper investigates how early termination of venture capital (VC) investment in entrepreneurial ventures affect the ability of these young ventures into acquiring further resources necessary for survival and growth. We propose that young entrepreneurial ventures face a higher cost of external financing if existing investors stop investing in the next rounds of financing. Future investors, faced with great unobservable qualities of young companies and the uncertainty surrounding their financial prospect, rely on observable characteristics to appraise a company; The continuation of investment by existing investors confers a positive signal about the quality of young ventures and that young ventures, as endorsed by further commitment of capital, are more likely to perform better than otherwise comparable ventures that lack such escalated commitment.

Place, publisher, year, edition, pages
Academy of Management , 2014. Vol. 2014, no 1
National Category
Economics and Business
URN: urn:nbn:se:kth:diva-161647DOI: 10.5465/AMBPP.2014.16575abstractOAI: diva2:851220

QC 20150904

Available from: 2015-09-03 Created: 2015-03-13 Last updated: 2015-09-04Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full text

Search in DiVA

By author/editor
Mohammadi, Ali
By organisation
Entrepreneurship and innovation
In the same journal
Academy of Management. Annual Meeting Proceedings
Economics and Business

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 45 hits
ReferencesLink to record
Permanent link

Direct link