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Poster - EMS Doctoral Consortium - Luis Almanza - Insights from non-financial factors.pdf

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Luis Almanza
Luis Almanza

This document summarizes research on the influence of human behavior on startup valuations at early funding stages. Interviews with 58 early-stage investors found that when information is limited to support valuation models, investors rely on heuristics, biases, and previous experiences. This challenges the traditional perspective that valuations are purely rational. The research establishes a theoretical foundation to further explore how human behavior impacts the valuation process and brings attention to the non-financial factors in valuations. Future work could validate current claims through quantitative research and explore valuations from the entrepreneur's perspective.

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What is the in f luence of human behavior in the startup valuation at an early stage? Seeking the roots of new venture valuations: Insights from non- f inancial factors. Findings Theoretical framing Methodology Conclusions Implications Future work Unit of analysis: Individuals (investors), with an in f luential role in the valuation decision-making process of tech startups at early-stage funding rounds (pre-seed, seed and Series A) Data collection: 58 Semi-structured open interviews. Data analysis: Open coding, axial coding, selective coding and theory construction • Research has documented the in f luence of human behavior variables in the investor's perspective at early-stage investments. • If the information is not available to support model assumptions, investors recur to previous experiences or current paradigms about the future (heuristics & biases). • Limited rationality and the inconsistent behavior. • Challenge traditional perspective about valuations. • Brings the attention of researchers, investors, and entrepreneurs to the non- f inancial side of valuations. • Establish a theoretical foundation for further exploring this human behavior in f luence's nature and its implications on the valuation process. • Introducing a new perspective to explore valuation methods and their e ff ectiveness. • Question dictation voice. • Explore the investor decision-making process using ethnographic research techniques to validate investor answers. • Validate current claims with quantitative research based on surveys, available data in the industry, and decision-making experiments. • Study the entrepreneur's perspective of the same phenomena. • Observe whether the e ff ect is strengthened or weakened over di ff erent investment rounds. Luis Almanza lma77@case.edu +52 444 510 9619 Areas of feedback • Feedback, advice, or new ideas. • Dissemination options (journals, magazines, books). • Interested VCs for behavior experiments (winter 2021, summer 2022). • Secondary data access. • Early-stage investors for data collection (surveys). • Research funds or sponsors.

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Poster - EMS Doctoral Consortium - Luis Almanza - Insights from non-financial factors.pdf

  • 1. What is the in f luence of human behavior in the startup valuation at an early stage? Seeking the roots of new venture valuations: Insights from non- f inancial factors. Findings Theoretical framing Methodology Conclusions Implications Future work Unit of analysis: Individuals (investors), with an in f luential role in the valuation decision-making process of tech startups at early-stage funding rounds (pre-seed, seed and Series A) Data collection: 58 Semi-structured open interviews. Data analysis: Open coding, axial coding, selective coding and theory construction • Research has documented the in f luence of human behavior variables in the investor's perspective at early-stage investments. • If the information is not available to support model assumptions, investors recur to previous experiences or current paradigms about the future (heuristics & biases). • Limited rationality and the inconsistent behavior. • Challenge traditional perspective about valuations. • Brings the attention of researchers, investors, and entrepreneurs to the non- f inancial side of valuations. • Establish a theoretical foundation for further exploring this human behavior in f luence's nature and its implications on the valuation process. • Introducing a new perspective to explore valuation methods and their e ff ectiveness. • Question dictation voice. • Explore the investor decision-making process using ethnographic research techniques to validate investor answers. • Validate current claims with quantitative research based on surveys, available data in the industry, and decision-making experiments. • Study the entrepreneur's perspective of the same phenomena. • Observe whether the e ff ect is strengthened or weakened over di ff erent investment rounds. Luis Almanza lma77@case.edu +52 444 510 9619 Areas of feedback • Feedback, advice, or new ideas. • Dissemination options (journals, magazines, books). • Interested VCs for behavior experiments (winter 2021, summer 2022). • Secondary data access. • Early-stage investors for data collection (surveys). • Research funds or sponsors.