The Wall Street Journal: Investors Are More Likely to Back Startups on Sunny Days, a Study Finds

A little sunshine can work wonders with investors.

That is the finding of a study that looked into how startups fared with potential investors at big meetup events. On days that were sunnier than the previous day, startups had a greater likelihood of getting funding, according to researcher Gary Dushnitsky, associate professor of strategy and entrepreneurship at London Business School.

Sunnier weather, the study found, acts as a stimulus to improve mood and is a feel-good factor that increases the likelihood of an investor committing to an investment. Sunnier weather is associated with a positive mood, which can sometimes filter into other decisions, including investors’ decision-making.

The sunny effect was more evident for startups in the earliest stages, where there is often less overall information available for an investor to assess or where the founders had little entrepreneurial experience.

“Some decisions can be affected by stimuli to your body,” says Prof. Dushnitsky. Investors, he says, “might have conviction [to invest], but it might come from factors that have nothing todo with the venture.”

Prof. Dushnitsky and another researcher used data from 1,335 startups that graduated from European accelerators—mentor-type programs for early-stage companies. The researchers compared weather data from the location of each “demo day”—a showcase for entrepreneurs to meet investors—with data from the day prior. They controlled for a host of other factors, including the founders’ backgrounds, age and prior entrepreneurship experience.

The results: Entrepreneurs attending a meetup on a sunnier day received funding 22% of the time, compared with 15% for days that were less sunny than the day prior, according to the research, published in the Academy of Management Journal earlier this year.

The positive feelings associated with sunnier weather drive “decision making on topics and issues that have no relevance,” Prof. Dushnitsky says.