Team Networks and Venture Success: Evidence From Token-Financed Startups

43 Pages Posted: 23 May 2023

See all articles by Wolfgang Drobetz

Wolfgang Drobetz

University of Hamburg

Kathrin Rennertseder

University of Hamburg

Henning Schröder

Leuphana University Lüneburg; Hamburg Financial Research Center

Date Written: May 18, 2023

Abstract

Evidence shows that social network structures drive important economic outcomes. Building on social network theory, this study is the first to analyse the impact of team networks on venture success. Using information about team affiliations for a sample of token-financed startups, we model networks based on team interlocks across firms. Ventures with well-connected teams exhibit higher market valuations and higher token market liquidity. These effects seem to be driven by network-induced information and communication advantages. Specifically, we show that networks matter most when publicly available information is limited. The findings remain robust after controlling for non-team networks and endogeneity.

Keywords: Team networks, venture success, token-financing, startups, social network analysis

JEL Classification: D85, G10, G24, G30, G32, L26, M13

Suggested Citation

Drobetz, Wolfgang and Rennertseder, Kathrin and Schröder, Henning, Team Networks and Venture Success: Evidence From Token-Financed Startups (May 18, 2023). Available at SSRN: https://ssrn.com/abstract=4452770 or http://dx.doi.org/10.2139/ssrn.4452770

Wolfgang Drobetz

University of Hamburg ( email )

Moorweidenstrasse 18
Hamburg, 20148
Germany

Kathrin Rennertseder

University of Hamburg ( email )

Moorweidenstrasse 18
Hamburg, 20146
Germany

Henning Schröder (Contact Author)

Leuphana University Lüneburg ( email )

Lueneburg
Germany

Hamburg Financial Research Center

Hamburg
Germany

HOME PAGE: http://www.hfrc.org

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