Research Spotlight: The Data Behind Who You Should Ask For Funding

Experienced founders and investors are the heartbeats behind any new venture ecosystem. They have the right funding, resources, and expertise to make a new business thrive. Dejun “Tony” Kong, University of Colorado Boulder (CU Boulder) Associate Professor of Organizational Leadership and Behavioral Analysis at the Leeds School of Business, is one of the scholars spearheading difficult-to-answer questions about entrepreneurial investments. Published in the Journal of Business Venturing, Tony, along with Curtis L. Wesley, Connor J. Lubojacky, M. Kim Saxton, and Todd Saxton, wrote the paper “Will the startup succeed in your eyes? Venture evaluation of resource providers during entrepreneurs' informational signaling”. Their entrepreneurial research surveyed over 200 pitch evaluations from nearly 100 startups and survey respondents over six years. Their work demonstrated the importance of start-up culture and the type of investor founders should focus on when building a business. 

Tony was born and grew up in Shanghai, China. When asked about his childhood, he mentions how he was a singer for 10 years, and performed in almost all the theaters in Shanghai. He jokes how maybe “that’s why I am artistic and creative at heart.” Nowadays, Tony spends his time singing just in the shower and writing complex theoretical data-driven discussions on entrepreneurship. Now that’s range! 

At the turning point in Tony’s life, he had an internship with Fortune Magazine in New York City, where he conducted business research and interviewed impactful individuals. This inspired him to pursue his Ph.D. and then an academic career. Tony's research attracted one of CU Boulder's top podcasts that "distills entrepreneurship research into actionable insights": Creative Distillation. 

The podcast is hosted by Deming’s own Brad Werner and Jeff York. In Episode 34, Tony mentions:

“Entrepreneurial literature is a really theoretical challenge. There is no theory on what’s in the mind of founders. What is the experience driving their funding decisions?”

Before Tony joined the team, this paper had a completely different focus. He was invited to work on the project by his former colleague at the University of Houston, Curtis Wesley. Tony saw the data and realized there might be a better perspective to take, and proposed that the team change the theoretical focus. Through informed risk-taking, they completely changed what the paper was about, and after many revisions, were able to successfully publish the paper. 

The new theoretical focus looks at three categories of people considering investing in new ventures. People with just investment experience, people with investment experience and founder experience, and people with just founder experience. When questioned about the results of his work, Tony recommends this:

“Based on our correlational data, I would recommend that aspiring entrepreneurs approach investors with founding experience. People who have founding experience are more willing to give advice to budding entrepreneurs, as well as support.”

Having adequate financial investments is not the only important predictor of success for a company. Tony hopes that the Boulder Start-up community creates and continues to create a space “where entrepreneurial ideas are exchanged, information and advice are shared, and support is provided.”