Gavin is a rising 6th-year PhD student in the Department of Operations, Information and Decisions of the Wharton School, with specialization in Information Systems. He examines how information technologies facilitate startup scaling. He graduated from Tsinghua University in 2017 with a Bachelor of Management, concentration in Accounting, and a minor in Law.
Abstract: Startups are increasingly using social media to signal quality and provide information to potential investors. However, the effectiveness of social media on VC financing is likely to be heterogeneous, differing by demographic and network characteristics of the venture management team. In this paper, we examine whether social media use can improve funding outcomes for firms founded by women and by other people also lacking connections to the investor network, two groups who face greater difficulties in securing VC financing. Using Twitter data and data on VC investment in startups from Crunchbase, we explore the interaction effect between Twitter usage and gender, and between Twitter usage and the network constraint measure. Overall, we show that social media can mitigate some disparities in financing experienced by these firms through improving information access. We find this effect is stronger for first-time entrepreneurs than for experienced ones, stronger for attracting new investors than repeat ones, and stronger in more competitive markets. Collectively, these results suggest that social media could primarily help women and less-connected individuals obtain financing by alleviating information asymmetry between founders and investors.
Kauffman Best Paper Award, International Conference on Information Systems, 2019