<div>Social capital through connections in networks has been argued to be important for startup enterprises. Founder human capital qualities like education, experience, skills have also been shown to be important predictors of startup success. However, does founder social capital matter for startup success beyond founder human capital? To answer this question, this project draws from the decision-making literature and uses five decision strategies to explore how founder human capital and social capital are associated with investment funds raised by startup companies. </div><div><br></div><div>Two studies were conducted. The first study investigated if a decision strategy that looks at founder social capital better predicts which company raises more investment funds than a decision strategy that only uses founder human capital. The second study investigated if actual investors and entrepreneurs, of varying expertise levels, integrate founder social capital variables while making investment decisions. </div><div><br></div><div>Both studies found that number of LinkedIn connections of founders of a company was the best predictor of investment funds raised by the company. The first study showed that decision strategies that use social capital cues are similar in predicting successful companies compared to strategies that use human capital cues. The next study showed that, contrary to our expectations, decision strategies that use social capital cues better predict investor choices than strategies that use only human capital cues. It was expected that models that used human capital cues would be better predictors of investor choice behavior than social capital cues. Therefore, the two studies show that founder social capital is associated with investment funds raised by a startup company and investors do take founder social capital into consideration while deciding which startup company to invest in. In doing so, the studies establish the importance of founder social capital in the entrepreneurial context. </div><div><br></div>

Background: This study investigates the role of gut feelings in early-stage venture investments, particularly in environments characterized by high uncertainty. By examining how both inexperienced and experienced investors utilize intuition, the research aims to uncover the cognitive and emotional foundations that influence investment decisions. Purpose: The research aims to understand how gut feelings impact investment decisions across different levels of investor experience. It compares the strategies of seasoned investors with those of novices, providing insights into how intuition and analytical reasoning are integrated. The objective is to offer practical guidance for investors on effectively combining gut feelings with analytical methods to navigate uncertain investment landscapes. Method: A multi-method qualitative approach was employed, combining semi-structured interviews and think-aloud protocols to capture real-time decision-making processes. Data were gathered from 11 investors, resulting in 14 hours of verbal protocols, which were subsequently analyzed using protocol analysis. A hypothetical investment scenario involving a fictional company, EcoPower Innovations, was used to elicit detailed responses from participants. Conclusion: The study finds significant differences in how gut feelings influence investment decisions based on the level of investor experience. Experienced investors skillfully blend intuition with data analysis, leveraging their expertise to manage uncertainty more effectively. In contrast, inexperienced investors tend to rely more on emotional impulses, demonstrating less integration of intuitive judgment with analytical reasoning. These findings highlight the importance of investor education in promoting the balanced use of gut feelings and analytical techniques, thereby improving decision-making in uncertain environments. Additionally, the research offers valuable insights for entrepreneurs on tailoring their approaches to potential investors based on their level of experience and expertise.