Download this Paper Open PDF in Browser

How Does Feedback Impact New Ventures? Fundraising in a Randomized Field Experiment

54 Pages Posted: 20 Apr 2016 Last revised: 11 Oct 2017

Rodrigo Andres Wagner

University of Chile - Business School; Harvard University - Center for International Development; Tufts University

Date Written: October 9, 2017

Abstract

Financial models assume startups learn from feedback, but it is hard to test it empirically. First, because demand and supply of information are endogenous. Second, because business education and acceleration bundle feedback with confounding treatments. This paper is the first randomized experiment testing how unsolicited written feedback impacts fundraising of high-stakes entrepreneurs. All 88 teams entered a global accelerator and received $40,000. A random half of them additionally received feedback to business-plans. Treated startups fundraised on average $15,000 more, being more likely to get funding and to survive. Results are consistent with feedback improving ventures, rather than just screening them

Keywords: business model, team performance, entrepreneurship, feedback handling

JEL Classification: G32, L26, D23

Suggested Citation

Wagner, Rodrigo Andres, How Does Feedback Impact New Ventures? Fundraising in a Randomized Field Experiment (October 9, 2017). Available at SSRN: https://ssrn.com/abstract=2766566

Rodrigo Andres Wagner (Contact Author)

University of Chile - Business School ( email )

Diagonal Paraguay 257
Torre 26, Of. 1801
Santiago
Chile

Harvard University - Center for International Development ( email )

79 John F. Kennedy Street
Cambridge, MA MA 02138
United States

Tufts University ( email )

Medford, MA 02155
United States

Paper statistics

Downloads
124
Rank
193,270
Abstract Views
605