Financing Entrepreneurial Experimentation / Ramana Nanda, Matthew Rhodes-Kropf.

Format:

Book

Author/Creator:

Nanda, Ramana.

Contributor:

National Bureau of Economic Research.

Rhodes-Kropf, Matthew.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21278.

NBER working paper series no. w21278

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

The fundamental uncertainty of new technologies at their earliest stages implies that it is virtually impossible to know the true potential of a venture without learning about its viability through a sequence of investments over time. We show how this process of experimentation can be particularly valuable in the context of entrepreneurship because most new ventures fail completely, and only a few become extremely successful. We also shed light on important costs to this process of experimentation, and demonstrate how these can fundamentally alter both the rate and direction of startup innovation across industries, regions and periods of time.

Notes:

Print version record

June 2015.