Abstract
How do venture capitalists (VCs) incorporate weak and strong signals in the valuation of technology-based startups? Based on a sociocognitive perspective of signaling theory, we introduce Twitter sentiment as a novel and weak signal, which we juxtapose with patents as a traditional, strong signal. While we find a positive association between both signals and VCs' venture valuations, our results reveal that Twitter sentiment does not correlate with actual long-term investment success, whereas patents do. Additionally, we identify and test novelty and experience characteristics (i.e., startup age and VC firm experience) as boundary conditions for our proposed signal-valuation relationships.
Originalsprache | Englisch |
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Aufsatznummer | 106062 |
Fachzeitschrift | Journal of Business Venturing |
Jahrgang | 36 |
Ausgabenummer | 2 |
DOIs | |
Publikationsstatus | Veröffentlicht - März 2021 |