Evidence and Identity in Entrepreneurial Finance

In this conceptual paper, we develop a novel framework to account for funder judgments in entrepreneurial finance. In doing so, we challenge the assumptions inherent in the signaling approach which has been the dominant perspective in entrepreneurial finance. Our framework builds on some of these recent approaches which emphasize the importance of signal sets or clusters. We also rely on recent work on founder identity and entrepreneurial identities to develop the novel concept of funder identity. We derive a series of propositions establishing connections between funder identity and evidence used to form judgments as well as boundary conditions at the funder and context levels.