This article contributes to a better understanding of the process of entrepreneurial finance from a behavioral perspective. We specifically examine the cognitive features and interaction of three key-actors in entrepreneurial finance: entrepreneurs, business angels and venture capitalists and derive implications for performance (value creation and growth) when a young venture raises external eq...

Small and informal enterprises are preponderant in Africa’s manufacturing sector. Their growth is negligibly low except when young and small, but little is known beyond this. This paper reports the results of our field study of a metalworking cluster in Nairobi. As competition was intensified by the entry of new enterprises, the education level of entrepreneurs became important in determining e...

We demonstrate that firm eponymy—the familiar convention of firms being named after their owners—is linked to superior performance. We propose a novel explanation, referred to as “utility amplification,” and develop a corresponding signaling model. The model generates three main empirical predictions: (1) The incidence of eponymy will be low; (2) Eponymous firms will outperform other firms; (3)...

This paper explains why seemingly irrational overconŽdent behavior can persist. Information aggregation is poor in groups in which most individuals herd. By ignoring the herd, the actions of overconŽdent individuals (“entrepreneurs”) convey their private information. However, entrepreneurs make mistakes and thus die more frequently. The socially optimal proportion of entrepreneurs trades off th...

Culture of entrepreneurs is also a sort of capital, which has a direct effect on development of enterprises in the process of economic operation of enterprises. Construction of cultural capital among entrepreneurs helps to enhance the overall competitive strength of Chinese enterprises in international society and helps to push forward development of the economic society. Due to historical reas...

The presence of externality, indivisibility, and uncertainty destroys the market's ability to coordinate production. Entrepreneurs rise to organize production by assuming a part of the allocative role traditionally reserved exclusively to the market. Assume that there are three classes of entrepreneurs: profit-oriented, nonprofit oriented and public entrepreneurs. These entrepreneurs cooperate ...

How do entrepreneurs decide to begin a full scale operation (i.e., exploitation of a new opportunity) in the entrepreneurial process? The question is investigated in a conjoint experiment with 55 entrepreneurs of high tech new ventures. The results suggest that entrepreneurs’ exploitation decision is positively affected by potential profitability (a low threat of imitation) and negatively by th...

This paper seeks to measure the extent to which entrepreneurs adjust their beliefs in the light of new information, rather than relying on past experience to guide their decision making. We build a model in which entrepreneurs continually receive valuable but noisy market signals about the true but unobserved productivity of their effort, and use this information to update their expectations of...

The Advantage of Experienced Start-Up Founders in Venture Capital Acquisition: Evidence from Serial Entrepreneurs Existing literature suggests that entrepreneurs with prior firm-founding experience have more skills and social connections than novice entrepreneurs. Such skills and social connections could give experienced founders some advantage in the process of raising venture capital. This pa...

This paper challenges the traditional view of the corporate tax as taxing corporate capital rather than the act of incorporating. Our model has no capital. Entrepreneurs pay to go public to diversify their risk. In discouraging incorporation, the tax keeps more entrepreneurs private and exposed to more risk. The tax falls primarily on high-skilled entrepreneurs and to a lesser extent on labor, ...