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Strategic Disclosure and Startup Funding
Last registered on October 28, 2019

Pre-Trial

Trial Information
General Information
Title
Strategic Disclosure and Startup Funding
RCT ID
AEARCTR-0004291
Initial registration date
October 23, 2019
Last updated
October 28, 2019 1:30 PM EDT
Location(s)

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Primary Investigator
Affiliation
Columbia University
Other Primary Investigator(s)
PI Affiliation
University of Minnesota
PI Affiliation
Columbia University
Additional Trial Information
Status
In development
Start date
2019-10-29
End date
2020-04-30
Secondary IDs
Columbia IRB: AAAS5167
Abstract
This project studies the extent to which withholding information about a startup can influence the evaluation of and financing of startups. To do so, we perform two randomized control trials asking two distinct populations of investment related individuals to assess the value of a startup by looking at two investment decks. We include four treatment arms, where we (a) withhold information about the team background, (b) withhold information about team financing, (c) include both pieces of information, or (d) omit both pieces of information. We then assess, as our primary outcome, the extent to which subjects differentially evaluate a startup based on this absence of information. As a secondary outcome, we consider the total time spent on the remaining slides and the ways in which subjects use other information to assess startup quality, using a slide-tracking software (DocSend) that allows us to see how many seconds each individual spends in each slide.
External Link(s)
Registration Citation
Citation
Chiles, Bennett, Jorge Guzman and Sandy Yu. 2019. "Strategic Disclosure and Startup Funding." AEA RCT Registry. October 28. https://doi.org/10.1257/rct.4291-1.0.
Sponsors & Partners

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Experimental Details
Interventions
Intervention(s)
This project studies the extent to which withholding information about a startup can influence the evaluation of and financing of startups. To do so, we perform two randomized control trials asking two distinct populations of investment related individuals to assess the value of a startup by looking at two investment decks. We include four treatment arms, where we (a) withhold information about the team background, (b) withhold information about team financing, (c) include both pieces of information, or (d) omit both pieces of information. We then assess, as our primary outcome, the extent to which subjects differentially evaluate a startup based on this absence of information. As a secondary outcome, we consider the total time spent on the remaining slides and the ways in which subjects use other information to assess startup quality, using a slide-tracking software (DocSend) that allows us to see how many seconds each individual spends in each slide.
Intervention Start Date
2019-10-29
Intervention End Date
2020-03-31
Primary Outcomes
Primary Outcomes (end points)
Our primary outcomes are survey measures of interest in the company... We will focus on the answer to the following three questions:
1. What is your preliminary assessment of what this company is worth at its current stage?
2. Suppose you were a VC investor. Please select one option below that best describes your assessment of this company.
3. I believe that this company will survive more than 3 years.

As robustness, we will also consider the following two questions:
1. I believe that this company will be successful in raising additional funds from VC and/or angel investors.
2. I believe that this company will achieve a successful equity outcome such as an IPO or acquisition.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
We will use time spent in other slides as tracked by DocSend to assess what other pieces of information do evaluators choose to spend time in.

We will also conduct exploratory analysis on potential heterogeneity of treatment effects (with respect to both team/firm characteristics and evaluator characteristics).
Secondary Outcomes (explanation)
Our secondary outcomes will aim to understand how information is learned by evaluators . To do so, we will use DocSend, which is a platform that allows startups to share slides and get analytics on those slides. We will then assess in which ones do entrepreneurs spend relatively more time in the absence of the information we have provided.
Experimental Design
Experimental Design
This project studies the extent to which withholding information about a startup can influence the evaluation of and financing of startups. To do so, we perform two randomized control trials asking two distinct populations of investment related individuals to assess the value of a startup by looking at two investment decks. We include four treatment arms, where we (a) withhold information about the team background, (b) withhold information about team financing, (c) include both pieces of information, or (d) omit both pieces of information. We then assess, as our primary outcome, the extent to which subjects differentially evaluate a startup based on this absence of information. As a secondary outcome, we consider the total time spent on the slides and the ways in which subjects use other information to assess startup quality, using a slide-tracking software (DocSend) that allows us to see how many seconds each individual spends in each slide.
Experimental Design Details
Not available
Randomization Method
Full randomization (randomly assigned through Qualtrics).
Randomization Unit
Person-deck level (each participant will receive two pitch decks to evaluate; each of these two pitch decks will be randomly assigned).
Was the treatment clustered?
Yes
Experiment Characteristics
Sample size: planned number of clusters
We aim to collect responses from at least 150 participants (though it is possible that we will obtain more responses than this; it is also possible that we are not able to obtain our target).

We are soliciting (via email) 368 MBA students that are members of the Columbia Business School Venture Capital club, and will continue to collect responses for at least two weeks; if we have at least 150 survey responses by the end of this two weeks, we will cease collection at that point. If we have fewer than 150 survey responses at the two-week mark, we will continue collecting responses for another week. We will end our collection after three weeks even if we have fewer than 150 responses.
Sample size: planned number of observations
We aim to collect at least 300 slide deck evaluations (150 participants x 2 slide decks each). See details above with regard to our planned procedure for survey administration. We will collect for two weeks. If we have less than 100 subjects, we will do another week with an additonal email request. Email once now, and once next week, and one 24 hours before the survey closes.
Sample size (or number of clusters) by treatment arms
40% of randomly assigned slide decks will contain both team and funding information
40% of randomly assigned slide decks will contain team details but NO funding information
10% of randomly assigned slide decks will contain funding information but NO team details
10% of randomly assigned slide decks will omit both team details and funding information
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
For our MBA experiment, there is no existing literature from which to use to develop power calculations. For the VC experiments, we will use the MBA results as guidance for power calculations. Our MBA sample contains the email addresses of 368 students. We aim to obtain at least 150 responses (a 40% response rate).
Supporting Documents and Materials

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IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
University of Minnesota
IRB Approval Date
2019-09-26
IRB Approval Number
STUDY00007210
IRB Name
Columbia University
IRB Approval Date
2019-06-05
IRB Approval Number
AAAS5167