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Vol 39 No 3 (2024): September

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Jan 21, 2024
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Jul 12, 2024
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Sep 11, 2024
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Do the Characteristics of Startup Founders Matter for Funding Performance?

https://doi.org/10.22146/jieb.v39i3.11841
Rayenda Khresna Brahmana
School of Economics, Finance, and Accounting, Coventry University, Coventry, United Kingdom
Doddy Setiawan
doddy.setiawan@staff.uns.ac.id
Faculty of Economics and Business, Universitas Sebelas Maret, Surakarta, Indonesia
https://orcid.org/0000-0003-0394-0738
Evan Lau
Faculty of Economics and Business, Universiti Malaysia Sarawak, Samarahan, Malaysia
https://orcid.org/0000-0001-9999-5842
Maria Kontesa
Faculty of Economics and Business, Universitas Widya Dharma Pontianak, Pontianak, Indonesia

Corresponding Author(s) : Doddy Setiawan

doddy.setiawan@staff.uns.ac.id

Journal of Indonesian Economy and Business, Vol 39 No 3 (2024): September

Abstract

Introduction/Main Objectives: Based on the upper echelons theory, this research examines the role of startup founders' characteristics on startup funding performance (SFP). This study considers the founder's experience, education, and gender as the characteristics that positively affect the SFP. Background Problems: While academia and industry emphasize the importance of startup funding performance (SFP), the empirical evidence on its determinant has received less attention. Yet, upper echelons theory addresses the importance of a leader's characteristics in increasing the organization's performance. Therefore, the current study focuses on investigating the role of startup founders' characteristics in the SFP. Novelty: The current study proposes the founder's characteristics as the key factor for startup funding. Unlike previous studies, this study utilized a survey design to answer the research question. Additionally, this study is the pioneer for entrepreneurial finance studies in gauging the upper-echelons framework. Research Methods: This research collected information from 228 Indonesian Startups through a survey. The estimation model is estimated using robust cross-sectional OLS regression and logistic regression. For robustness purposes, this study tackles the endogeneity issue by using two-stage least squares (TSLS) and PLS-SEM. Finding/Results: The regression results (including the two-stage least square approach) reveal that education and gender play a significant role in SFP but not experience. Moreover, it shows that higher education would increase a startup's probability of having better funding. Meanwhile, male entrepreneurs have lower funding performance than women entrepreneurs. Conclusion: Our study surmises that the education of the founders is crucial for startup financing in Indonesia. It also shows that the experience of founders has a trivial effect. It supports the upper echelons theory, emphasizing the pivotal role of founders' characteristics in entrepreneurial finance. Policy-wise, focusing on education can enhance startup success while addressing gender disparities is crucial. However, limitations exist, suggesting the need for longitudinal studies and broader sample sizes. Future research could explore managerial abilities and cultural factors, offering fresh insights into the literature.

Keywords

education experience startups founder's characteristics startups funding
Brahmana, R. K., Setiawan, D., Lau, E., & Kontesa, M. (2024). Do the Characteristics of Startup Founders Matter for Funding Performance?. Journal of Indonesian Economy and Business, 39(3), 328 -. https://doi.org/10.22146/jieb.v39i3.11841
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Author Biographies

Rayenda Khresna Brahmana, School of Economics, Finance, and Accounting, Coventry University, Coventry, United Kingdom

Rayenda Khresna Brahmana is a lecturer at the School of Economics, Finance, and Accounting, Coventry University. He completed his Ph.D. at Universiti Sains Malaysia. He has published in reputable journals such as Business Strategy and the Environment, International Journal of Finance and Economics, Research in International Business and Finance, Global Finance Journal, and Marine Policy, totaling 78 Scopus documents. His research area is corporate finance, corporate strategy, digital finance, and investment.

Doddy Setiawan, Faculty of Economics and Business, Universitas Sebelas Maret, Surakarta, Indonesia

Doddy Setiawan is a Professor in Financial Accounting at the Department of Accounting, Faculty of Economics and Business, Universitas Sebelas Maret (UNS), Indonesia where he has been a faculty member since 2000. He earned his Bachelor's degree in Accounting at the Faculty of Economics and Business, Universitas Sebelas Maret, Indonesia. He did his Master’s degree in Accounting at Universitas Gadjah Mada, Indonesia. He earned his second master's degree in International Master in Regional Integration (IMRI) at Universiti Malaya, Malaysia. Besides, he completed his Ph.D. from Universiti Sains Malaysia, Malaysia. His research interests lie in the areas of corporate finance, small and medium enterprises, earnings management and disclosures. He has collaborated actively with other researchers from various fields in many research projects. He successfully published many articles in different top tier international journals, such as: Journal of Cleaner Production, Journal of Asian Business Studies, Global Finance Journal, Business Strategy and Development.

Evan Lau, Faculty of Economics and Business, Universiti Malaysia Sarawak, Samarahan, Malaysia

Evan Lau, a Professor at the Faculty of Economics and Business, Universiti Malaysia Sarawak (UNIMAS), holds a Bachelor's, Master's, and Ph.D. in International Economics from Universiti Putra Malaysia. With extensive academic experience, he has served as Deputy Dean for Research and Postgraduate, Director of the Centre for Business, Economics, and Finance Forecasting (BEFfore), and Head of Strategy. Currently, he is the Deputy Dean of Research and Commercialization. Internationally recognized, he has held visiting positions at the University of Cambridge and various Indonesian universities. His research spans international economics, finance, business economics, applied econometrics, and socioeconomics, resulting in 110 journal articles and 92 research papers. As an active researcher, Evan has secured 32 research grants and has supervised 86 postgraduate students, examining 74 postgraduate theses and 145 undergraduate research projects. Evan speaks at numerous international conferences in Indonesia, UAE, Sri Lanka, Italy, India, Philippines, China and Malaysia. He has received numerous accolades, including the Young Researcher Award and Highest-Impact Journal Paper Award. Listed among the Top 9% of economists in Malaysia and ASEAN, and Top 10% in Asia by RePEc, Evan is also an avid runner and traveler, committed to research excellence and academic leadership.

Maria Kontesa, Faculty of Economics and Business, Universitas Widya Dharma Pontianak, Pontianak, Indonesia

Maria Kontesa is an associate professor at the Faculty of Economics & Business, Universitas Widya Dharma Pontianak. She earned her bachelor's, master's, and doctoral degrees from Universitas Tanjungpura. Her research interests lie in the areas of accounting reporting, small business accounting, and disclosure. She has successfully published many articles in top-tier international journals, such as Business Strategy and the Environment, Pacific Accounting Review, Accounting Research Journal, Journal of Management and Governance, Managerial Finance, Marine Policy, and The Journal of Entrepreneurship.

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