Do Startups Benefit From Their Investors’ Reputation?
Dr. Shai Bernstein
Marvin Bower Associate Professor
Entrepreneurial Management Unit
Harvard Business School
We analyze a field experiment conducted on AngelList Talent, a large online search platform for startup jobs. In the experiment, AngelList randomly informed job seekers of whether a startup was funded by a top-tier investor and/or was funded recently. We find that the same startup receives significantly more interest when information about top-tier investors is provided. Information about recent funding has no effect. The effect of top-tier investors is not driven by low-quality candidates and is stronger for earlier-stage startups. The results provide the first direct evidence that venture capitalists can add value to startups passively by attaching their names to portfolio companies.
