about this episode
Laura Huang is a Professor of Management and Entrepreneurship at the Wharton School, University of Pennsylvania. Laura’s research examines how an investor’s gut feel plays a role in innovation and entrepreneurial decision making. She explores how perceptions and cues influence an individual’s ability to make important, high-stakes decisions, how attractiveness and gender affect pitch success, and if investors are behaving differently in those circumstances because of the valid pressure on the investment community to see more diversity. Join us in this thought-provoking discussion about the known unknowns in the angel investing space, Jason’s theory of investment, and what meritocracy really means in Silicon Valley.
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01:40: Jason introduces today’s guest, Laura Huang, Professor of Entrepreneurship at Wharton
2:25: Studying how angel investors make decisions is very experiential
5:50: Laura explains her multimethod system that includes variables such as interviews, content analysis, and videos
8:42: How to pick investors
9:15: Partnership with Angel Capital Association
10:00: Results of the study
11:00: In her interviews, Laura found that a lot of investors would go back and say “I just had this gut feeling”
12:20: Laura wanted to quantify the unquantifiable, taking something like gut feeling and seeing what’s actually embedded in that
14:30: One of Jason’s organizing principles of angel investing is that if everybody understands the idea and believes in it, then it will not have an outsized outcome, because it’s too obvious of an idea and should have been done already
19:19: Attractiveness in relation to getting investment: females are not as funded as men, but attractive men get an extra premium and are funded the most
20:57: How to determine attractiveness
24:30: Hacking biases
27:00: How answering investor questions can differ by gender and how questions are being asked could impact how an entrepreneur responds
33:00: Laura explains what it’s like as a woman doing research on male bias
35:10: Which is the main issue: women and how they present, or investors and their biases?
37:15: Advice on hacking biases
38:00: Effect of American accents on getting funding
42:00: Jason’s approach to female entrepreneurs
46:00: Role of aggression
47:00: Jason and Laura debate about investing in entrepreneurs that are uncoachable
51:00: What gets entrepreneurs like Steve Jobs, Travis, Elon Musk into the industry
53:00: Chart of “Exchange-Based Model of the Entrepreneur-Investor Relationship”
57:00: Jason’s theory of investment
59:37: Chart of “Effect of Perceptions of the Entrepreneur on Propensity to Invest”
01:00:00: Investors would rather invest in a strong person with a bad idea than a weak person with a great idea
01:03:20: How often is the “gut call” more just an angel betting on a jockey vs. the business opportunity or projections?
01:05:20: Obesity/smoking and how that affects the perception of being fundable
01:08:14: Do you believe Silicon Valley is a meritocracy?