The Added-Value of Network Connections in Entrepreneurial Finance

40 Pages Posted: 24 Jul 2016

See all articles by Ricardo Pasquini

Ricardo Pasquini

Universidad Austral - Facultad de Ciencias Empresariales; Universidad Torcuato Di Tella - School of Government

Gabriela Robiolo

Universidad Austral

Date Written: July 23, 2016

Abstract

Entrepreneurs are usually exhorted to attract the best networked investors. We provide further insights into this advice by estimating network effects in the performance of entrepreneurial ventures. We show dimensions that are critical in this estimation, such as the consideration for startups’ connections, common connections among investors, and the decreasing returns to network centrality, and estimate their relative importance. We estimate networks effects using an an original database of connections among startups, investors and individuals with relevant roles in California, collected from web-based sources, resulting in a network of nearly 1 million connections.

Keywords: Entrepreneurial Finance, Investor’s value added, Networks

JEL Classification: G24,L14, M13

Suggested Citation

Pasquini, Ricardo and Robiolo, Gabriela, The Added-Value of Network Connections in Entrepreneurial Finance (July 23, 2016). Available at SSRN: https://ssrn.com/abstract=2813652 or http://dx.doi.org/10.2139/ssrn.2813652

Ricardo Pasquini (Contact Author)

Universidad Austral - Facultad de Ciencias Empresariales ( email )

Mariano Acosta s/n y Ruta Nac 8
Pilar, Buenos Aires, B1629WWA
Argentina

Universidad Torcuato Di Tella - School of Government ( email )

C1428ATG Buenos Aires
Argentina

Gabriela Robiolo

Universidad Austral ( email )

Juan de Garay 125
Buenos Aires, 1065
Argentina

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