Abstract

Many studies have been conducted to tease out the criteria VCs take into consideration when choosing which companies to invest in and when. However, few of the existing studies, which rely primarily on VC self-report, have meaningfully convergent results on what that criteria is. Thus, the question remains as to what information entrepreneurs should signal about their firm and how forcefully in order to increase their chances of securing venture financing. The main purpose of the paper is to provide a more objective view of the factors and milestones that prove most critical in VCs’ decisions to invest. Given that media attention is often reflective of ventures’ achieved milestones and/or new ventures can actively use media to communicate these milestone to their potential investors, this article explores whether the presence and concentration of certain signals affect the likelihood of securing financing more than others. This research aims to provide an alternative method of measurement of VC funding criteria and provide new ventures with a practical framework of what to concentrate their signaling activities on.

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