Conformity to a standard may simplify identification
of particular cues that in turn facilitate categorization
by decision makers (Zuckerman, 1999).
Given the opportunity cost of a venture capitalist’s
time, the extra cost of extracting cues from
a nonstandard artifact may increase the probability
that the opportunity associated with such an artifact
is categorized as ‘unattractive’ (Shepherd 1999).
Thus, conformity may be a cue. We hypothesize:
Hypothesis 1: Ventures associated with the submission
of a standard document, such as a business
plan or executive summary, are more likely
to receive VC funding.
Inclusion of information in business planning
documents
Similarly, conformity to a specific business form
may suggest to the VC that the entrepreneur is
doing things the ‘right way’ and make it easier to
find information in the planning document. Conversely,
an incomplete plan omits information and
may suggest strategic withholding of information.
Both arguments lead to the following hypothesis:
Hypothesis 1a: Controlling for the submission of
a planning document, ventures associated with
business plans that are complete—in the sense
that they conform to norms dictating what information
should be included—are more likely to
receive VC funding.
Following the logic summarized in Table 1,
adjudication of the possible justifications for
Hypothesis 1a depends upon whether the candidate
cues in the planning documents are predictors
of VC decision making.
Conformity to a standard may simplify identification
of particular cues that in turn facilitate categorization
by decision makers (Zuckerman, 1999).
Given the opportunity cost of a venture capitalist’s
time, the extra cost of extracting cues from
a nonstandard artifact may increase the probability
that the opportunity associated with such an artifact
is categorized as ‘unattractive’ (Shepherd 1999).
Thus, conformity may be a cue. We hypothesize:
Hypothesis 1: Ventures associated with the submission
of a standard document, such as a business
plan or executive summary, are more likely
to receive VC funding.
Inclusion of information in business planning
documents
Similarly, conformity to a specific business form
may suggest to the VC that the entrepreneur is
doing things the ‘right way’ and make it easier to
find information in the planning document. Conversely,
an incomplete plan omits information and
may suggest strategic withholding of information.
Both arguments lead to the following hypothesis:
Hypothesis 1a: Controlling for the submission of
a planning document, ventures associated with
business plans that are complete—in the sense
that they conform to norms dictating what information
should be included—are more likely to
receive VC funding.
Following the logic summarized in Table 1,
adjudication of the possible justifications for
Hypothesis 1a depends upon whether the candidate
cues in the planning documents are predictors
of VC decision making.
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