NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Patents as Signals for Startup Financing

Annamaria Conti, Jerry Thursby, Marie C. Thursby

NBER Working Paper No. 19191
Issued in June 2013
NBER Program(s):   IO   PR

We examine the role of patents as signals used to reduce information asymmetries in entrepreneurial finance. A theoretical model gives conditions for a unique separating equilibrium in which startup founders file for patents to signal invention quality to investors, as well as appropriating value. The theory allows for heterogeneous investors and examine the optimal match of different types of startups, as defined by the quality of their technology, to investors who differ in the amount of non financial capital they provide. The empirical analysis is consistent with the model's predictions using a novel dataset of Israeli startups that received external funding during the period 1994-2011.

download in pdf format
   (400 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19191

Published: Patents as Signals for Startup Financing† Annamaria Conti1, Jerry Thursby1 andMarie Thursby2 The Journal of Industrial Economics Special Issue: SYMPOSIUM ON PATENTS, ENTREPRENEURSHIP AND INNOVATION. Edited by Mark Schankerman Volume 61, Issue 3, pages 592–622, September 2013 citation courtesy of

Users who downloaded this paper also downloaded these:
Conti, Thursby, and Rothaermel w17050 Show Me the Right Stuff: Signals for High Tech Startups
Figueroa and Serrano w18982 Patent Trading Flows of Small and Large Firms
Chatterji, Glaeser, and Kerr w19013 Clusters of Entrepreneurship and Innovation
Barberis, Greenwood, Jin, and Shleifer w19189 X-CAPM: An Extrapolative Capital Asset Pricing Model
Czarnitzki, Hall, and Hottenrott w19947 Patents as Quality Signals? The Implications for Financing Constraints on R&D
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us