A Comprehensive Model for Idea Evaluation at Early-Stage Level (Pre-Seed)

Dissertation presented as the partial requirement for obtaining a Master's degree in Information Management, specialization in Marketing IntelligenceNowadays, governments encourage people to be an entrepreneur and start their businesses. Because small and medium enterprises play a critical role in economic growth as well as social subjects. However, statistics show a larger number of start-ups eventually fail due to several reasons. Among all, the cause of this failure could be a lack of correct evaluation of the idea at the early stage. Therefore, this study is seeking the most crucial criteria of the idea evaluation process to aid entrepreneurs to take the right assessment and prevent failure. The study uses a mixed method, which consists of narratives and systematic review, and then follows a series of qualitative interviews with start-up coaches, business investors, and both successful and failed start-up founders to have comprehensive opinions about the explored criteria. In the conclusion, the study suggests a framework of idea evaluation that is consists of the 16 most significant idea evaluation criteria which distributed among four stages. This framework could be considered as a feed for future studies to use artificial intelligence for assessing start-up ideas at the early stage

Empirical essays on agency problems in venture capital

In the first essay, we explore the potential agency conflict between limited partners and general partners in venture capital firms due to changes in investment style. Investment style refers to the characteristics of a venture capital funds portfolio, such as the portfolio companies stage of development, location, and industry. While investment style can significantly impact the risk and return profile of a fund, it is usually not explicitly agreed upon by limited and general partners. We argue that changes in investment style, known as style drifts, can reveal information about the risk-taking behavior of venture capitalists and present empirical evidence in support of this claim. To determine whether style drifts constitute an agency conflict, we consider two sets of hypotheses. The first set posits that style drifts are intentional decisions to take on more risk, potentially driven by incentives related to compensation or employment. The second set suggests that style drifts may occur because of competitive pressure and may not necessarily be indicative of an intent to increase risk. Our findings suggest that style drifts are likely to create an agency conflict, as the evidence supports the hypothesis that well-performing venture capitalists increase investment risk to benefit from higher compensation potential via carried interest when they feel confident, they will be able to raise a follow-on fund securing their base income via management fees. Additionally, we examine the impact of style drifts on individual investments and fund performance and find that overall, style drifts hurt a funds exit rate, indicating the potential for increased risk. In the second essay, we examine the relationship between venture capitalists and entrepreneurs, specifically focusing on the role of information asymmetry in the funding process. Using text classification and text mining techniques we analyze the content and level of detail in capital allocation plans provided by entrepreneurs to investors, which serve as a proxy for private informational updates that are typically not widely available. Our analysis shows that investors do consider the content and specificity of these updates when making valuation decisions and that both positive information signals and more detailed information are related to higher valuations. We also investigate the effect of the relative level of information asymmetry between venture capitalists and entrepreneurs on the value of these updates, finding that they are more impactful in situations where there is a higher level of information asymmetry. The results of our study have practical implications for entrepreneurs, as we find that the negative impact of negative information signals can be offset by providing highly specific information and that the value of an informational update is influenced by the existing level of information asymmetry. In the third essay, I explore the impact of university affiliations on the initial matching process between venture capitalists and founders, the involvement of the investor during the funding relationship, and the eventual startup performance and investment exit success. University affiliations can influence the funding relationship through two channels: first, attending a top university may serve as a signal of founder quality to venture capitalists, helping them to avoid adverse selection; second, shared alumni networks may establish trust and reduce information asymmetry between otherwise unknown individuals. Using a dataset of 42,101 investments involving 38,452 unique venture capitalists and founders, I find that educational ties between venture capitalists and founders have a positive effect on the funding relationship, including the initial matching, the level of involvement of the investor during the funding relationship, and the eventual startup performance and investment exit success. The effect of sharing an educational background between a venture capitalist and a founder is about five times larger than the effect of a founder attending a top university. Further, the results also show that educational ties are more valuable the more exclusive they are, and that redundant ties between the founding team and the investors have diminishing value for the investment decision.Im ersten Aufsatz wird der potenzielle Agency-Konflikt zwischen Limited Partners und Risikokapitalgebern in Risikokapitalgesellschaften aufgrund von Änderungen des Investitionsstils untersucht. Der Investitionsstil bezieht sich auf die Merkmale des Portfolios eines Risikokapitalfonds, wie z.B. das Entwicklungsstadium, den Standort und die Branche der Portfoliounternehmen. Der Anlagestil kann sich zwar erheblich auf das Risiko- und Ertragsprofil eines Fonds auswirken, wird aber in der Regel nicht ausdrücklich von den Limited Partners und Risikokapitalgebern vereinbart. Wir argumentieren, dass Veränderungen im Anlagestil, die so genannten Style Drifts, Aufschluss über das Risikoverhalten von Risikokapitalgebern geben können, und präsentieren empirische Belege zur Unterstützung dieser Behauptung. Um festzustellen, ob Style Drifts einen Agency-Konflikt darstellen, prüfen wir zwei Hypothesen. Die erste Hypothese besagt, dass Style Drifts absichtliche Entscheidungen zur Übernahme von mehr Risiko sind, die möglicherweise durch Anreize im Zusammenhang mit der Vergütung bedingt sind. Die zweite Hypothese besagt, dass Style Drifts als Folge von Wettbewerbsdruck auftreten können und nicht unbedingt auf eine beabsichtigte Risikoerhöhung hindeuten. Unsere Ergebnisse deuten darauf hin, dass Style Drifts wahrscheinlich zu einem Agency-Konflikt führen, da die Ergebnisse die Hypothese stützen, dass leistungsstarke Risikokapitalgeber das Anlagerisiko erhöhen, um von einem höheren Vergütungspotenzial über Carried Interest zu profitieren, wenn sie sich sicher sind, dass sie in der Lage sein werden, einen Folgefonds einzuwerben, der ihr Grundeinkommen über Managementgebühren sichert. Darüber hinaus untersuchen wir die Auswirkungen von Style Drifts auf einzelne Investitionen und die Fondsperformance und stellen fest, dass Style Drifts insgesamt die Erfolgsquote eines Fonds beeinträchtigen, was auf ein erhöhtes Risiko hinweist. Im zweiten Aufsatz untersuchen wir die Beziehung zwischen Risikokapitalgebern und Unternehmern und konzentrieren uns dabei insbesondere auf die Rolle der Informationsasymmetrie im Finanzierungsprozess. Mithilfe von Textklassifizierungs- und Textmining-Techniken analysieren wir den Inhalt und den Detaillierungsgrad von Kapitalallokationsplänen, die den Investoren von den Unternehmern zur Verfügung gestellt werden. Unsere Analyse zeigt, dass Investoren den Inhalt und die Spezifität dieser Informationsaktualisierungen bei ihren Bewertungsentscheidungen berücksichtigen und dass sowohl positive Informationssignale als auch detailliertere Informationen mit höheren Bewertungen verbunden sind. Wir untersuchen auch die Auswirkungen des relativen Ausmaßes der Informationsasymmetrie zwischen Risikokapitalgebern und Unternehmern auf den Wert dieser Informationsaktualisierungen und stellen fest, dass sie in Situationen mit einem höheren Maß an Informationsasymmetrie größere Auswirkungen haben. Die Ergebnisse unserer Studie haben praktische Auswirkungen für Unternehmer, da wir feststellen, dass die negativen Auswirkungen negativer Informationssignale durch die Bereitstellung hochspezifischer Informationen ausgeglichen werden können und dass der Wert einer Informationsaktualisierung vom bestehenden Grad der Informationsasymmetrie beeinflusst wird. Im dritten Aufsatz untersuche ich die Auswirkungen von Universitätszugehörigkeiten auf den anfänglichen Matching-Prozess zwischen Risikokapitalgebern und Gründern, die Beteiligung des Investors während der Finanzierungsbeziehung und die letztendliche Performance des Start-ups und den Erfolg der Investition beim Ausstieg. Die Zugehörigkeit zu einer Universität kann die Finanzierungsbeziehung über zwei Kanäle beeinflussen: Erstens kann der Besuch einer Spitzenuniversität den Risikokapitalgebern als Signal für die Qualität des Gründers dienen und ihnen helfen, Adverse Selection zu vermeiden; zweitens können gemeinsame Alumni-Netzwerke Vertrauen schaffen und Informationsasymmetrien zwischen ansonsten unbekannten Personen verringern. Anhand eines Datensatzes von 42.101 Investitionen, an denen 38.452 Risikokapitalgeber und Gründer beteiligt waren, stelle ich fest, dass sich Bildungsbeziehungen zwischen Risikokapitalgebern und Gründern positiv auf die Finanzierungsbeziehung auswirken, einschließlich des anfänglichen Matchings, des Umfangs des Engagements des Investors während der Finanzierungsbeziehung und der letztendlichen Startup-Performance und des Erfolgs beim Ausstieg aus der Investition. Der Effekt eines gemeinsamen Bildungshintergrunds zwischen einem Risikokapitalgeber und einem Gründer ist etwa fünfmal so groß wie der Effekt eines Gründers, der eine Spitzenuniversität besucht hat. Außerdem zeigen die Ergebnisse, dass Bildungsbeziehungen umso wertvoller sind, je exklusiver sie sind, und dass redundante Beziehungen zwischen dem Gründerteam und den Investoren einen abnehmenden Wert für die Investitionsentscheidung haben

Business model innovation reshaping the grocery retail

Analisi dell'evoluzione portata nell'ambito del business modelope

ALIGNING THE APPEAL OF ENTREPRENEURS TO INVESTORS: WHY IS THERE A NEED FOR AN OPTIMAL ENTREPRENEURSHIP TRAINING MODULE IN THE KINGDOM OF SAUDI ARABIA TO BETTER ENGAGE ENTREPRENEURS WITH INVESTORS

Little of the available funding reaches entrepreneurs and SMEs in the Kingdom of Saudi Arabia. This lack of financing ability, known as credit rationing, is mainly due to information asymmetries and is a pressing issue in Saudi Arabia. The Saudi government is relying on the entrepreneurship and SMEs subsector to diversify the Kingdom’s economy away from the dominance of oil and to create jobs for young Saudis who are underemployed. This study aims to answer a question that hypothesizes that entrepreneurs need an optimal training module to understand the types of information that investors utilize in investment decisions and the type of “signals” from entrepreneurs that inspire confidence in investors. The human capital theory suggests that a quality training program can establish a skill base that will improve return on investment. The signaling theory suggests that the challenge of imperfect information can be largely overcome by training entrepreneurs to send more accurate and more targeted signals to investors regarding their character, skills, and the viability of their projects. The study uses both quantitative and qualitative methods in data collection. The research was conducted within the Saudi cities of Riyadh, Jeddah, and Dammam, where most of the entrepreneurial activities and SMEs development are located. It suffered some limitations due to access to data and the conservativeness of the Saudi population in responding to academic studies that affected the sample size The findings reveal that entrepreneurs with an in-depth understanding of investors’ due diligence process are more likely to invest adequately to assemble appropriate skill sets and learn to signal the characteristics that investors appreciate while tailoring their ventures and business plans to meet investors’ ideals. A training module that includes these components can be vital in overcoming credit rationing in the Kingdom. Universities, mainly business schools, may play a significant role in providing the optimal training module, with collaboration from investors. This study contributes to the literature by representing the history of the entrepreneurship and SMEs development in the Kingdom through three main periodical stages. Also, it identifies the assessment studies that international management consultants prepared to several Saudi government agencies in the subject field. This contribution is more likely to help future researchers in having more practical information about the entrepreneurship and SMEs ecosystem in the Kingdom. Furthermore, the study has implications on entrepreneurship and SMEs development stakeholders such as entrepreneurs, investors, training institutes, and regulators. Few recommendations are proposed. The study concludes with suggestions for research in related subject areas in Saudi Arabia and potentially other countries with similar economies

Agile Processes in Software Engineering and Extreme Programming

This open access book constitutes the proceedings of the 21st International Conference on Agile Software Development, XP 2020, which was planned to be held during June 8-12, 2020, at the IT University of Copenhagen, Denmark. However, due to the COVID-19 pandemic the conference was postponed until an undetermined date. XP is the premier agile software development conference combining research and practice. It is a hybrid forum where agile researchers, academics, practitioners, thought leaders, coaches, and trainers get together to present and discuss their most recent innovations, research results, experiences, concerns, challenges, and trends. Following this history, for both researchers and seasoned practitioners XP 2020 provided an informal environment to network, share, and discover trends in Agile for the next 20 years. The 14 full and 2 short papers presented in this volume were carefully reviewed and selected from 37 submissions. They were organized in topical sections named: agile adoption; agile practices; large-scale agile; the business of agile; and agile and testing

The adversities of doing business in China: Why western companies fail

It is commonly known that People’s Republic of China was created and ruled by several years on closed and indoor economy policies, making it extremely hard to establish a business in China. Therefore, this document aims to understand the motives behind the failure of western companies in China, focusing on the mistakes made and how can they be avoided. The literature review begins with a contextualization of the economic and culture evolution of the Chinese society. Additionally, by defining the concept of failure it was possible to improve the understanding of the withdraw of three foreign companies from the Chinese market and to analyse how funding can help avoiding failure. In order to collect data, in-depth interviews were conducted which included the participation of leading businesspeople. The combination of the Literature Review with the data collected has made possible to prove that entrepreneurs face numerous adversities and obstacles whenever dealing with Chinese companies or individuals, when compared to the western ways of doing business. Adversities such as lack of trustworthy relationships, cultural differences, unrealistic investment time and reduced time present in the country, disloyalty regarding the Chinese “catch-up effect” or even lack of support from the Chinese government, have led some businesses to flee the country. Additionally, the most surprising discovery creates a paradox between old theories and nowadays theories. According to several participants and researchers, the power of guanxi in China, may be losing its effectiveness.É sabido que a República Popular da China foi criada, e é governada há vários anos, numa ótica de políticas económicas fechadas, tornando extremamente difícil a realização de negócios na China. Neste sentido, o presente documento visa entender os motivos responsáveis pelo fracasso das empresas ocidentais na China, focandose nos erros cometidos pelos mesmos e como estes podem ser evitados. A revisão da literatura começa com uma contextualização da evolução económica e cultural da sociedade chinesa. Além disso, ao definir o conceito de fracasso, foi possível entender as razões que levaram à saída de três empresas estrangeiras do mercado chinês e analisar como o financiamento pode ajudar a evitar o insucesso neste mercado. De modo a recolher dados, foram realizadas entrevistas em profundidade que incluíram a participação de grandes empresários. A combinação da revisão da literatura com os dados recolhidos possibilitou concluir que os empreendedores enfrentaram inúmeras adversidades e obstáculos ao lidar com empresas e indivíduos chineses, comparativamente com a abordagem ocidental para negociar. A falta de relacionamentos de confiança, as diferenças culturais, o tempo de investimento irrealista e o reduzido tempo de presença física no país, a deslealdade quanto ao catch-up effect chinês ou até mesmo a falta de apoio do governo chinês são exemplos de adversidades que levaram algumas empresas a abandonar a sua atividade económica neste país. Além disso, a descoberta mais surpreendente cria um paradoxo entre as teorias antigas e as atuais: segundo vários participantes e investigadores, o poder do guanxi na China pode estar a perder seu significado

Organizational Transformation through Business Models: A Framework for Business Model Design

Organizations are increasingly inter-connected as they source talent, goods and services from other organizations located in disparate parts of the world. They seek new ways of creating value for themselves, customers and partners. They operate outside and across traditional industry boundaries and definitions. These innovations have lead to a focus on business models as a fundamental statement of direction and identity. This paper highlights what is known about the business model concept and where and why it differs from more established concepts of business strategy. It illustrates how the application of business models has transformed organizations. The contribution of this paper is the guidance that it provides for business model design and the insight it provides into business models and their effects on organizations. Following an analysis of how business models can transform organizations, this paper concludes with practical recommendations for business model design

The Self-Employment Process: A Discourse of Psychological Attributes and Entrepreneurial Socialization

This dissertation presents a discussion of the role of psychological attributes and entrepreneurial socialization in the self-employment process. Self-employment process is considered to involve four components; intentions, entry, success and persistence/ commitment. Burton, Sørensen, and Dobrev (2016) noted that entrepreneurship research has primarily focused on founding new businesses or transitions into entrepreneurial roles as ends in themselves. They argue that this approach tends to ignore that entry and exit from entrepreneurship carries career transition connotations. By focusing on the self-employment process, the dissertation to some extend pays attention to the psychological and socialization factors that facilitate transition into self-employment as a feasible alternative to traditional salaried employment, as well as a path to avoid or get out of unemployment. Therefore, self-employment is presented in this dissertation as a path to achieving successful career life. Research on protean career behaviors emphasizes that individuals should take more control over their career development process (Briscoe & Hall, 2006; Lent & Brown, 2013; Sullivan & Baruch, 2009). Particularly, the importance of flexibility in career choices and career paths is highlighted because careers are no longer systematic (Arnold, 2001; Baruch, 2004), hence individuals do not have to stick to their learned trades or to traditional organizational employment to achieve success. Rather career mobility, which involves frequent transitions to and from different career trades, has become common. Self-employment presents an opportunity for individuals to self-determinedly take charge of their career development. Not only because of autonomy at work, but it is the most available employment opportunity in most parts of the world, thanks to the constantly changing dynamics in the labor market. At the close of 2000s, the world plummeted into an economic and financial crisis that resulted into turbulence in the labor market. Job insecurity and unemployment increased to new record levels, which remain high to present day congruent to Reinhart and Rogoff's (2009) claim that prolonged unemployment crises often occur in the aftermaths of economic crises. Hence, self-employment has increasingly become an important career path in many countries. Moreover, entrepreneurship has also become an important contributor to economic growth and resilience facilitated by the movement from industrial to service-driven economies. The studies presented in this dissertation explore a range of psychological and socialization factors that facilitate the processes of formation of intention to pursue a career in self-employment, actual entry into self-employment, success, as well as commitment to remain self-employed. Research often treats these components of the process as separate subjects. However, the experiences at each of these stages of the entrepreneurial process, from the careers perspective (Burton et al., 2016) have implications for remaining or exiting from the self-employment. Particularly, two patterns can be observed from this dissertation. First, the formation of self-employment intention and its association with self-employment entry. Second, entrepreneurial success and its implications for commitment to self-employment as a career path. The purpose of the dissertation was to establish the self-employment trajectory from development of intention to success and commitment. However, this is only possible in a very long period. Literature shows, for example, that the study of association between intention and entry alone is best predictable after 18 years (Schoon & Duckworth, 2012). Therefore, the present studies could not observe the entire trajectory. But rather pays attention to personal attributes and contexts proximal to the individual that shape the intention, movement into, success and commitment to self-employment career path. Particularly, the studies examine the role of psychological attributes including personality, cognitive styles, moral and cultural intelligences, psychological capital, and entrepreneurial attitudes. Concerning the contextual factors, attention is paid to entrepreneurial socialization processes comprising of entrepreneurship mentoring and culture. The culture question is addressed at both personal and national level. Consequently, the manuscripts address four pertinent research questions. These questions are central to the understanding of the role of psychological and socialization factors in the self-employment process, and also understanding of self-employment as a career path, rather than just a means of establishing and managing businesses. The research questions are: 1. How do Protean attributes and socialization factors work together to influence readiness to go into business? 2. How does one’s cognitive attributes and cultural values affect intentions to make a career in self-employment? 3. What psychological attributes are necessary for the effectiveness of entrepreneurial mentoring in leading to higher self-employment intentions and entry? 4. What personal attributes and socialization factors are critical for the realization of different entrepreneurial outcomes? These research questions have been answered with robust results presented in nine manuscripts. The first two manuscripts address research question one. Based on person-fit perspective, these manuscripts revealed that entrepreneurial intention is associated with protean attributes including personal initiative, flexibility, and career orientation. However, the effect of personal initiative and career orientation were only substantial among student samples, while the effect of flexibility was observed among graduates, and not among students. Manuscripts #3 and #4 are dedicated to answering research question two. Results in these manuscripts show support for Theory of Planned Behavior (TPB) but further indicate that there are possible interactions among antecedents of intention. Particularly the results indicate that locus of control (control beliefs) impact on self-employment intentions via entrepreneurial attitudes. Yet the direct and indirect effects were moderated by individualistic normative beliefs. In addition, results especially in Manuscript #3 reveal interactive effects of personal cultural and moral values (risk aversion and moral potency) and cognitive style on self-employment intention of unemployed young people. Individuals using adaptive cognitive style reported strong self-employment intentions. However, those using intuitive style also reported strong self-employment intention when risk aversion is low, and when moral potency is high. Results presented in Manuscripts #5 and #6 answer research question three. Once again the interaction effects of entrepreneurial socialization (mentoring) and personal attributes (self-determination/ autonomy and psychological capital) on self-employment intentions were confirmed. Results of a longitudinal study (Manuscript #6) further support TPB demonstrating that individuals with higher entrepreneurial intentions were more likely to go into self-employment after graduating from university. However, cross-cultural differences were observed and are discussed. Lastly, in regard to research question four; findings presented in Manuscripts #7 - #9 generally indicate that personal attributes, specifically psychological capital and behavioral cultural intelligence, were associated with both subjective and objective outcomes including psychological needs satisfaction, meaning in life, entrepreneurs’ job satisfaction, entrepreneurial performance and growth, as well as income. Satisfying the need for autonomy was also associated with other subjective outcomes. Moreover, most of these outcomes as well as psychological capital had substantial effect on one’s commitment to the self-employment career path

ASA 2021 Statistics and Information Systems for Policy Evaluation

This book includes 25 peer-reviewed short papers submitted to the Scientific Opening Conference titled “Statistics and Information Systems for Policy Evaluation”, aimed at promoting new statistical methods and applications for the evaluation of policies and organized by the Association for Applied Statistics (ASA) and the Department of Statistics, Computer Science, Applications DiSIA “G. Parenti” of the University of Florence, jointly with the partners AICQ (Italian Association for Quality Culture), AICQ-CN (Italian Association for Quality Culture North and Centre of Italy), AISS (Italian Academy for Six Sigma), ASSIRM (Italian Association for Marketing, Social and Opinion Research), Comune di Firenze, the SIS – Italian Statistical Society, Regione Toscana and Valmon – Evaluation & Monitoring