Patents as Quality Signals for Entrepreneurial Ventures

Name

Patents as Quality Signals for Entrepreneurial Ventures

Cite

Mack Ctr. for Tec. Innovation Working Paper

Year

2007

Bluebook cite

David Hsu & Rosemarie Ziedonis, Patents as Quality Signals for Entrepreneurial Ventures (Apr. 2007) (unpublished manuscript, on file with Mack Ctr. for Technological Innovation working paper series), available at http://elsa.berkeley.edu/~bhhall/e222spring07_files/ HsuZiedonis07_PatentSignaling_abstables.pdf

Author

David Hsu & Rosemarie Ziedonis

URL

http://elsa.berkeley.edu/~bhhall/e222spring07_files/ HsuZiedonis07_PatentSignaling_abstables.pdf

Item Type

article

Summary

Signaling quality to external resource providers is an important yet challenging activity for nascent organizations. This study examines the degree to which patents enable entrepreneurs to acquire financial capital, a critical resource for venture development, under favorable terms. While prior studies show that third-party affiliations can be used to “endorse” or “certify” the underlying value of young companies, empirical evidence is largely confined to later stages of development when startups seek capital in public equity markets. We contribute new evidence by examining the use of quality signals—including patents—in earlier phases in the entrepreneurial life cycle, from first receipt of venture capital financing through liquidation or successful exit. We also allow entrepreneurs to differ in their ability to shape initial investor expectations based on heterogeneity in reputation endowments (e.g., from prior experience or success as founders of new companies).

Excerpts and Summaries

Created

Wednesday 19 of August, 2009 18:41:01 GMT
by Unknown

LastModif

Wednesday 19 of August, 2009 18:41:01 GMT
by Unknown