Abstract

Drawing on signaling theory and using a certification lens, we examine how new ventures credibly communicate their underlying quality, using a unique dataset of 627 new ventures that sought investment from a prominent angel group located in the greater Boston, MA area during 2007-2010. Findings suggest that signals of quality are multi-dimensional, that they are more important when accompanied with a reliable referral, and that they are dynamic, with different types of signals mattering at different times in the angel investment decision-making process. Implications are discussed.

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