Title

Alumni Networks in Entrepreneurial Financing

Publication Date

11-24-2021

Abstract

One in three deals in the early-stage financing market involves an investor and founder from the same alma mater. We show that founders' connections to early-stage investors through shared education networks are more important than school academic quality or shared geography in facilitating access to funding. Early-stage investors tilt their portfolios toward startups from their alma mater and place larger bets on these firms. Connected investments outperform the same investors' non-connected investments. Our results are stronger where information about founder abilities is likely less clear.

Document Type

Article

Keywords

Alumni networks, SAT scores, Startup financing, PitchBook, Innovation, Patents, IPOs, Acquisitions

Disciplines

Finance

DOI

10.2139/ssrn.3970128

Source

SMU Cox: Finance (Topic)

Language

English

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