Why would an investor back a failed entrepreneur?
In this episode of The Why Podcast, Gary Dushnitsky takes us through his latest paper to answer: Is it time to reassess failure?
Most ventures fail – so what happens when an entrepreneur goes to investors seeking backing for their next new business?
In this episode of The Why Podcast, Gary Dushnitsky takes us through his latest research and paper: How do investors evaluate past entrepreneurial failure – unpacking failure due to lack of skill versus bad luck.
Listen to Gray Dushnitsky in conversation with Kathy Brewis as he describes how he set out to discover, in the context of equity crowdfunding, whether investors would shy away from failed entrepreneurs, or if they would take additional information into account when they considered whether to fund them anyway. The key insight, he says, is as follows; success is indicative of both skill and luck; failure tells us less as it may arise due to either mistakes or misfortune. Is it time to reassess failure all together?
Read the full paper here: How do investors evaluate past entrepreneurial failure? Unpacking failure due to lack of skill versus bad luck.
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Gary Dushnitsky is Associate Professor of Strategy and Entrepreneurship at London Business School. He teaches on electives for MBA, Executive MBA and Masters in Finance students including Financing the Entrepreneurial Business and The Entrepreneurship Lab.
