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DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?

Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect th...

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Main Authors: Rayenda Khresna, Brahmana, Doddy, Setiawan, Evan, Lau, Maria, Kontesa
Format: Article
Language:English
Published: Universitas Gadjah Mada 2024
Subjects:
HA Statistics
HB Economic Theory
HG Finance
Online Access:http://ir.unimas.my/id/eprint/47025/1/document-2.pdf
http://ir.unimas.my/id/eprint/47025/
https://journal.ugm.ac.id/v3/jieb/article/view/11841
https://doi.org/10.22146/jieb.v39i3.11841
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spelling my.unimas.ir-470252024-12-24T07:18:47Z http://ir.unimas.my/id/eprint/47025/ DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE? Rayenda Khresna, Brahmana Doddy, Setiawan Evan, Lau Maria, Kontesa HA Statistics HB Economic Theory HG Finance Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect the SFP. Background Problems: While academia and industry emphasize the importance of startup funding performance (SFP), the empirical evidence on its determinant has received less attention. Yet, upper echelons theory addresses the importance of a leader's characteristics in increasing the organization's performance. Therefore, the current study focuses on investigating the role of startup founders' characteristics in the SFP. Novelty: The current study proposes the founder's characteristics as the key factor for startup funding. Unlike previous studies, this study utilized a survey design to answer the research question. Additionally, this study is the pioneer for entrepreneurial finance studies in gauging the upper-echelons framework. Research Methods: This research collected information from 228 Indonesian Startups through a survey. The estimation model is estimated using robust cross-sectional OLS regression and logistic regression. For robustness purposes, this study tackles the endogeneity issue by using two-stage least squares (TSLS) and PLS-SEM. Finding/Results: The regression results (including the two-stage least square approach) reveal that education and gender play a significant role in SFP but not experience. Moreover, it shows that higher education would increase a startup's probability of having better funding. Meanwhile, male entrepreneurs have lower funding performance than women entrepreneurs. Conclusion: Our study surmises that the education of the founders is crucial for startup financing in Indonesia. It also shows that the experience of founders has a trivial effect. It supports the upper echelons theory, emphasizing the pivotal role of founders' characteristics in entrepreneurial finance. Policy-wise, focusing on education can enhance startup success while addressing gender disparities is crucial. However, limitations exist, suggesting the need for longitudinal studies and broader sample sizes. Future research could explore managerial abilities and cultural factors, offering fresh insights into the literature. Universitas Gadjah Mada 2024-09-01 Article PeerReviewed text en http://ir.unimas.my/id/eprint/47025/1/document-2.pdf Rayenda Khresna, Brahmana and Doddy, Setiawan and Evan, Lau and Maria, Kontesa (2024) DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE? Journal of Indonesian Economy and Business, 39 (3). pp. 328-346. ISSN 2338-5847 https://journal.ugm.ac.id/v3/jieb/article/view/11841 https://doi.org/10.22146/jieb.v39i3.11841
institution Universiti Malaysia Sarawak
building Centre for Academic Information Services (CAIS)
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Sarawak
content_source UNIMAS Institutional Repository
url_provider http://ir.unimas.my/
language English
topic HA Statistics
HB Economic Theory
HG Finance
spellingShingle HA Statistics
HB Economic Theory
HG Finance
Rayenda Khresna, Brahmana
Doddy, Setiawan
Evan, Lau
Maria, Kontesa
DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?
description Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect the SFP. Background Problems: While academia and industry emphasize the importance of startup funding performance (SFP), the empirical evidence on its determinant has received less attention. Yet, upper echelons theory addresses the importance of a leader's characteristics in increasing the organization's performance. Therefore, the current study focuses on investigating the role of startup founders' characteristics in the SFP. Novelty: The current study proposes the founder's characteristics as the key factor for startup funding. Unlike previous studies, this study utilized a survey design to answer the research question. Additionally, this study is the pioneer for entrepreneurial finance studies in gauging the upper-echelons framework. Research Methods: This research collected information from 228 Indonesian Startups through a survey. The estimation model is estimated using robust cross-sectional OLS regression and logistic regression. For robustness purposes, this study tackles the endogeneity issue by using two-stage least squares (TSLS) and PLS-SEM. Finding/Results: The regression results (including the two-stage least square approach) reveal that education and gender play a significant role in SFP but not experience. Moreover, it shows that higher education would increase a startup's probability of having better funding. Meanwhile, male entrepreneurs have lower funding performance than women entrepreneurs. Conclusion: Our study surmises that the education of the founders is crucial for startup financing in Indonesia. It also shows that the experience of founders has a trivial effect. It supports the upper echelons theory, emphasizing the pivotal role of founders' characteristics in entrepreneurial finance. Policy-wise, focusing on education can enhance startup success while addressing gender disparities is crucial. However, limitations exist, suggesting the need for longitudinal studies and broader sample sizes. Future research could explore managerial abilities and cultural factors, offering fresh insights into the literature.
format Article
author Rayenda Khresna, Brahmana
Doddy, Setiawan
Evan, Lau
Maria, Kontesa
author_facet Rayenda Khresna, Brahmana
Doddy, Setiawan
Evan, Lau
Maria, Kontesa
author_sort Rayenda Khresna, Brahmana
title DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?
title_short DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?
title_full DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?
title_fullStr DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?
title_full_unstemmed DO THE CHARACTERISTICS OF STARTUP FOUNDERS MATTER FOR FUNDING PERFORMANCE?
title_sort do the characteristics of startup founders matter for funding performance?
publisher Universitas Gadjah Mada
publishDate 2024
url http://ir.unimas.my/id/eprint/47025/1/document-2.pdf
http://ir.unimas.my/id/eprint/47025/
https://journal.ugm.ac.id/v3/jieb/article/view/11841
https://doi.org/10.22146/jieb.v39i3.11841
_version_ 1819914981706039296
score 13.223943

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