projection and acquisition of funding, the fact that
the expected revenue stream was believed by all
to be lower than promised would not invalidate
the underlying relationship between planning document
and expected outcome. In contrast, if lowquality
entrepreneurs do not truthfully report their
own personal histories, then we might not detect
a connection between the underlying attributes of
the founding team and the outcome of the venture.
Moreover, if entrepreneurs do not engage in
strategic disclosure of information, we would not
be able to exploit the inclusion of information to
ascertain the role of the planning document.
Presently, we develop our formal hypotheses.
We identify candidate cues as follows: If a given
factor or attribute has been shown in the literature
to be a determinant of new venture outcomes (i.e.,
predictive of the presence of funding, a successful
business launch, or achieving growth and scale)
and the information content is readily verifiable,
then we examine this attribute as a potential decision
cue. We also exploit variation in the form of
requests for funding. For the sake of brevity, our
literature reviews of the underlying relationships
between the factors and success are necessarily
incomplete.
Finally, given our context we hypothesize specifically
about VC decision making. However, the
theory may generalize to other settings. For example,
other investors in new businesses, such as
banks or individual private equity investors (business
angels or angels), may use similar decisionmaking
heuristics because both operate in similar
environments. Moreover, social networks and business
planning documents almost certainly play a
role in these sources of exchange.
Business plan as standard artifact
Leading entrepreneurship texts strongly encourage
business plan authors to follow conventional formatting
when constructing a business plan and,moreover, are generally in agreement as to the
information that should be included in a plan
projection and acquisition of funding, the fact that
the expected revenue stream was believed by all
to be lower than promised would not invalidate
the underlying relationship between planning document
and expected outcome. In contrast, if lowquality
entrepreneurs do not truthfully report their
own personal histories, then we might not detect
a connection between the underlying attributes of
the founding team and the outcome of the venture.
Moreover, if entrepreneurs do not engage in
strategic disclosure of information, we would not
be able to exploit the inclusion of information to
ascertain the role of the planning document.
Presently, we develop our formal hypotheses.
We identify candidate cues as follows: If a given
factor or attribute has been shown in the literature
to be a determinant of new venture outcomes (i.e.,
predictive of the presence of funding, a successful
business launch, or achieving growth and scale)
and the information content is readily verifiable,
then we examine this attribute as a potential decision
cue. We also exploit variation in the form of
requests for funding. For the sake of brevity, our
literature reviews of the underlying relationships
between the factors and success are necessarily
incomplete.
Finally, given our context we hypothesize specifically
about VC decision making. However, the
theory may generalize to other settings. For example,
other investors in new businesses, such as
banks or individual private equity investors (business
angels or angels), may use similar decisionmaking
heuristics because both operate in similar
environments. Moreover, social networks and business
planning documents almost certainly play a
role in these sources of exchange.
Business plan as standard artifact
Leading entrepreneurship texts strongly encourage
business plan authors to follow conventional formatting
when constructing a business plan and,moreover, are generally in agreement as to the
information that should be included in a plan
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