Investment Decision Making, Consensus and “decision Stickiness” in the Grant Application Review Process: an Empirical Study of Technology-based Small Enterprise

ACADEMIC ABSTRACT This research examines the development of consensus when evaluating small business applicant presentations during a second round screening process for Department of Defense related funding. Drawing on literature from decision dilemma research, we examined whether a second round screening process resulted in greater consensus among panel members and to what extent those panel members " stuck " to their evaluations over time. In general, we found that expert panel members can reach consensus and that technical experts appear to be the most " sticky " in their pre and post assessments. Our results offer implications for both early stage entrepreneurs and entrepreneurship researchers. EXECUTIVE SUMMARY Predicting the future success of early to mid-stage technologies is one of the most fundamental challenges confronting those involved in making resource support decisions. Accordingly, this research examines the development of consensus when evaluating small business applicant presentations during a second round screening process for Department of Defense related funding. Drawing on literature from decision dilemma research, we examined whether a second round screening process resulted in greater consensus among panel members and to what extent those panel members " stuck " to their evaluations over time. Decision dilemma research suggests that individuals will tend to increase cooperation and build consensus following group discussion about the dilemma. However, participant personalities, and discussion environments, both can have an important moderating effect on generating consensus from group discussions. We examined the technology assessment process used by a congressional-funded Department of Defense technology transfer agency and collected pre and post expert assessment evaluations from participating panels of experts in the final stages of the screening process. We found that while 2 nd stage technology application reviews involving panel presentation and discussions do lead to greater consensus regarding the grant decision, the consensus process appears to converge around the original assessments of the technical reviewers. This exploratory study offers implications for both practitioners and researchers. Entrepreneurs seeking funding would be well-advised to present a solid case that can stand up to the challenging queries that can be expected from technical experts. Thus, it is critical that someone from the organization with a deep technical background be present for such panel discussions. From a research perspective, this exploratory project links the equity funding literature from entrepreneurship research to the psychological literature on decision dilemma research. We believe that this study will serve as a basis for additional inquiry …