Judging Foreign Startups

102 Pages Posted: 19 Apr 2021 Last revised: 27 Jan 2023

See all articles by Nataliya Langburd Wright

Nataliya Langburd Wright

Harvard University - Business School (HBS)

Rembrand Koning

Harvard University - Business School (HBS)

Tarun Khanna

Harvard University - Business School (HBS)

Date Written: January 13, 2023

Abstract

Can accelerators pick the most promising startup ideas no matter their provenance? Using unique data from a global accelerator where judges are randomly assigned to evaluate startups headquartered across the globe, we show that judges are less likely to recommend startups headquartered outside their home region by 4 percentage points. Back-of-the-envelope calculations suggest this discount leads judges to pass over 1 in 20 promising startups. Despite this systematic discount, we find that—in contrast to many past studies—judges can discern startup quality and are no better at evaluating local firms. These differences emerge because the pool of startups accelerator judges evaluate is both broader and less “local,” suggesting that judging ability depends on the composition of the companies they are tasked with evaluating.

Keywords: Entrepreneurship and Strategy, Global Strategy, Entrepreneurial Financing, Innovation, International

JEL Classification: M13, M16

Suggested Citation

Wright, Nataliya and Koning, Rembrand and Khanna, Tarun, Judging Foreign Startups (July 6, 2022). Available at SSRN: https://ssrn.com/abstract=3822854 or http://dx.doi.org/10.2139/ssrn.3822854

Nataliya Wright (Contact Author)

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Rembrand Koning

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Boston, MA 02163
United States

Tarun Khanna

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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