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image/svg+xml Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Closed Access logo, derived from PLoS Open Access logo. This version with transparent background. http://commons.wikimedia.org/wiki/File:Closed_Access_logo_transparent.svg Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Strategic Management...arrow_drop_down
image/svg+xml Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao Closed Access logo, derived from PLoS Open Access logo. This version with transparent background. http://commons.wikimedia.org/wiki/File:Closed_Access_logo_transparent.svg Jakob Voss, based on art designer at PLoS, modified by Wikipedia users Nina and Beao
Strategic Management Journal
Article . 2023 . Peer-reviewed
License: Wiley Online Library User Agreement
Data sources: Crossref
SSRN Electronic Journal
Article . 2021 . Peer-reviewed
Data sources: Crossref
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Judging foreign startups

Authors: Nataliya Langburd Wright; Rembrand Koning; Tarun Khanna;

Judging foreign startups

Abstract

Abstract Research Summary 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. Managerial Summary Accelerators often seek the most promising startup ideas. Yet, they can only do so if their judges can discern the quality of startups, both local and foreign to them, without systematic bias. We used unique data from a global accelerator where judges are assigned to evaluate startups headquartered across the globe and find that, while judges can detect the quality of both local and foreign startups, they discount startups foreign to them, hindering their ability to accept the best startup ideas. As venture capitalists increasingly source startups from accelerators, this foreign discounting can result in investors passing over promising ideas. However, simple measures like reducing the threshold for startups evaluated by foreign judges may help reduce judges' foreign discounting and enable picking the best companies.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
10
Top 10%
Average
Average
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