Funding ventures similar to one of us: How status dynamics within heterogeneous groupsaffect venture evaluation
We examine how status dynam-ics in heterogeneous evaluator groups affect the evalua-tion of a target venture where some evaluatorsresemble the venture team while some do not. Usingdata from a funding competition in China, we theorizeand empirically show that the emergence of a statushierarchy among evaluator group members based ontop-university affiliation leads non-top-universitymembers to favor top-university venture teams by(a) increasing the visibility and positive value oftop-university affiliation as a quality signal and(b) suppressing challenging questions directed at top-university teams. By introducing small group statusdynamics as an explanation for similarity bias in ven-ture evaluation, we contribute to the literature onresource mobilization in early-stage entrepreneurship.
