AOMLogo-24_H

Improving Management Scientifically

Blog-Card-NEWS-500x150

News about AOM and our members as reported by media outlets worldwide

Blog-Card-RELEASES-500x150

Press releases, updates and important announcements from AOM

Sidney Morning Herald: Need funds? Ask investors on a sunny day

26 Feb 2021
New AMJ research has led to the discovery of sunshine as an undeniable factor that influences the likelihood of an investor’s positive appraisal.

Originally found at The Sidney Morning Herald, by James Adonis.

There is perhaps no entrepreneurial stage more vulnerable than the very beginning when a startup is barely a startup.

When aspiring entrepreneurs have an idea but no cash and have a vision but no track record, they’re commonly found cap in hand as they seek investors to fund their venture. The insecurity and uncertainty of these early days has been a source of much study and analysis resulting in many factors of success that include the market, the competitive advantage and the forecasted revenues.

Another can now be added to the list. In research due to be published soon in the highly cited Academy of Management Journal, scholars from London Business School have analysed over 1300 startups and the pitch each founder delivered to potential investors. This has led to the discovery of sunshine as an undeniable factor that influences the likelihood of an investor’s positive appraisal.

The influence of sunshine can be attributed to its effect on our mood. It’s the element that explains why many people feel happier when it’s sunny, why they’re more sociable when it’s a nice day outside and why they migrate in their millions to Australia from the United Kingdom.

So it stands to reason there’d be a similar advantageous effect when the desired outcome of someone’s mood is the handing over of their money. Especially when the context for doing so is almost entirely subjective since there’s very little (if any) objective data or historical information with which to evaluate the proposal. Startup investors rely to a large extent on their gut feeling.


Continue reading the original article at The Sydney Morning Herald.

Read the original research in Academy of Management Journal.

Also read this AOM Insights summary citing this research.

Learn more about the AOM Scholars and explore their work: