Alumni Networks in Entrepreneurial Financing

Jon A Garfinkel; Erik J Mayer; Ilya A Strebulaev; Emmanuel Yimfor

doi:10.2139/ssrn.3970128

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Alumni Networks in Entrepreneurial Financing

Working paper

Open access

Alumni Networks in Entrepreneurial Financing

Jon A Garfinkel, Erik J Mayer, Ilya A Strebulaev and Emmanuel Yimfor

SMU Cox School of Business Research Paper, Vol.No. 21-17

SSRN

11/24/2021

DOI: 10.2139/ssrn.3970128

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Abstract

One in three deals in the venture capital market involves an investor and founder from the same alma mater. We show these connections facilitate VC funding and improve outcomes. Venture capitalists tilt their portfolios toward startups from their alma mater and place larger bets on these firms. Results are stronger when information about founder abilities is less clear, and connected investments outperform the same investors’ unconnected investments. Tests exploiting alumni interactions from college football games and VC-partner turnover suggest a causal relationship between connections and funding. Overall, our evidence suggests information benefits from education networks in the venture capital market.

Alumni Networks

Startup Financing

Innovation

IPO

Acquisition

SAT Score

PitchBook

Details

Title: Subtitle: Alumni Networks in Entrepreneurial Financing
Creators: Jon A Garfinkel - University of Iowa
Erik J Mayer - Southern Methodist University
Ilya A Strebulaev - Stanford University
Emmanuel Yimfor - University of Michigan–Ann Arbor
Resource Type: Working paper
Publication Details: SMU Cox School of Business Research Paper, Vol.No. 21-17
Publisher: SSRN
DOI: 10.2139/ssrn.3970128
Number of pages: 78 pages
Language: English
Date posted: 11/24/2021
Date updated: 07/13/2023
Academic Unit: Finance
Record Identifier: 9984380710302771

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