Funding Decisions and Entrepreneurial Team Diversity: A Field Study

Rick Vogel, Tatjana Xenia Puhan, Edlira Shehu, Doron Kliger, Henning Beese

Research output: Contribution to journalJournal articleResearchpeer-review


This study provides experimental evidence, using a large sample of 2894 individuals recruited via business media websites, about the impact of demographic attributes within entrepreneurial teams on funding decisions by external capital providers. In previous work the role of diversity with regard to personal characteristics within entrepreneurial teams, such as education, gender and nationality was not clear. Specifically, we focus on task-oriented (e.g., education, experience) and relations-oriented (e.g., age, nationality) dimensions of diversity. The participants of our experiment had to decide on providing early-stage funding to a team of start-up managers whereas the diversity of these teams varied across treatment groups. We find that task-oriented diversity is positively and significantly related to the willingness of respondents to provide capital. Interestingly, the same applies for relations-oriented diversity. This suggests social capital of an entrepreneurial team matters to a greater extent to funding decisions of external investors than the behavioral integration of the team's human capital. Entrepreneurial teams must therefore carefully balance the social costs of non-task-related diversity and the access to financial resources.
Original languageEnglish
JournalJournal of Economic Behavior & Organization
Issue numberB
Pages (from-to)595-613
Number of pages19
Publication statusPublished - 2014
Externally publishedYes


  • Decision-making
  • Online survey
  • Top management teams
  • Upper echelons
  • Venture capital

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