Valentina Assenova is an Assistant Professor in the Management Department at the Wharton School, University of Pennsylvania. Her research interests center on the formation, growth, and funding of early-stage firms in emerging and developing economies, with a focus on sub-Saharan Africa. She has collaborated with organizations such as FINCA International and the Overseas Private Investment Corporation on projects and initiatives that advance entrepreneurship and economic development in emerging economies. She holds a Ph.D., M.Phil., and M.A. in Management from Yale University, M.B.A. in International Management from the University of Cambridge, and B.Sc. in Economics from the Wharton School.
Abstract: We use data on 27,082 individuals from 45 countries playing the Startup Game, a roleplaying simulation of early-stage startup funding, to examine theorized causes for the gap in startup funding for female entrepreneurs. By using features of the game, such as random assignment, we conduct a natural experiment to understand how social processes such as homophily and discrimination shaped startup equity funding and company valuation. We examine the results of the game and compare them against “gender-blind” results to explain the root causes of gender inequality in venture capital (VC) funding. The results show that women randomly assigned to the role of “founder” systematically received 7% less equity capital and traded 4% more shares relative to men, resulting in 11% lower valuations for the same startups. Taste-based discrimination among male VCs favoring male founders accounts for the majority of this gap, implying that the gender composition of the investor pool holds the key to bridging the gap. Consistent with this explanation, we find that increasing the proportion of female VCs by 1% was associated with decreasing the gender gap by 272%.
Valentina Assenova (Under Revision), Institutional Change and Early Stage Startup Selection: Evidence from Applicants to Venture Accelerators.
Valentina Assenova (Under Revision), Early Stage Venture Incubation Promotes Learning, Scaling, and Profitability among Under-Resourced Entrepreneurs.
Abstract: Complex innovations– ideas, practices, and technologies that hold uncertain benefits for potential adopters—often vary in their ability to diffuse in different communities over time. To explain why, I develop a model of innovation adoption in which agents engage in naïve (DeGroot) learning about the value of an innovation within their social networks. Using simulations on Bernoulli random graphs, I examine how adoption varies with network properties and with the distribution of initial opinions and adoption thresholds. The results show that: (i) low-density and high-asymmetry networks produce polarization in influence to adopt an innovation over time, (ii) increasing network density and asymmetry promote adoption under a variety of opinion and threshold distributions, and (iii) the optimal levels of density and asymmetry in networks depend on the distribution of thresholds: networks with high density (>0.25) and high asymmetry (>0.50) are optimal for maximizing diffusion when adoption thresholds are right-skewed (i.e., barriers to adoption are low), but networks with low density (<0.01) and low asymmetry (<0.25) are optimal when thresholds are left-skewed. I draw on data from a diffusion field experiment to predict adoption over time and compare the results to observed outcomes.
Abstract: Entrepreneurs in many emerging economies start their firms informally, without registering with the state. We examine how informality at the time of founding affected the performance of 12,146 firms in 18 countries across sub-Saharan Africa. Our findings indicate that entrepreneurs who registered their firms at founding enjoyed greater success in terms of sales and employment. But these benefits varied widely across countries. Consistent with the idea that legitimation processes account for these benefits, countries in which people trust their government more had larger advantages associated with being formal.
Valentina Assenova and Matthew Regele (2017), Revisiting the Effect of Colonial Institutions on Comparative Economic Development, PLoS One, 12 (5).
Abstract: European settler mortality has been proposed as an instrument to predict the causal effect of colonial institutions on differences in economic development. We examine the relationship between mortality, temperature, and economic development in former European colonies in Asia, Africa, and the Americas. We find that (i) European settler mortality rates increased with regional temperatures and (ii) economic output decreased with regional temperatures. Conditioning on the continent of settlement and accounting for colonies that were not independent as of 1900 undermines the causal effect of colonial institutions on comparative economic development. Our findings run counter to the institutions hypothesis of economic development, showing instead that geography affected both historic mortality rates and present-day economic output.
Olav Sorenson, Valentina Assenova, Guan-Cheng Li, Jason Boada, Lee Fleming (2016), Expanding innovation finance via crowdfunding: Crowdfunding attracts capital to new regions, Science, 354 (6319), pp. 1526-1528.
Abstract: Crowdfunding (CF) platforms, such as Kickstarter (KS), offer a means of funding innovation, connecting inventors and entrepreneurs with a multitude of supporters, who each provide a small fraction of the amount required to fund the project. Although considerable funding for innovation has historically come from venture capitalists (VCs), the entrepreneurs funded by VCs often mirror the investors in terms of their educational, social, and professional characteristics and end up concentrated in a small number of regions (1–4). Policy-makers have thus hailed CF platforms, hoping that they will expand access to entrepreneurial finance, including among women and minority innovators, and that the innovations funded will create jobs and spur economic growth (5). But if particular regions, or certain sorts of individuals, routinely produce better ideas (6), and VC concentrates on them, then CF might simply compete with professional investors to fund the same ideas. We find, however, that CF has been funding innovators in a large number of places that have typically been excluded from VC, and has also been expanding the geographic reach of VC itself.
Valentina Assenova, Jason Best, Mike Cagney, Douglas Ellenoff, Kate Karas, Jay Moon, Sherwood Neiss, Ron Suber, Olav Sorenson (2016), The Present and Future of Crowdfunding, California Management Review, 58 (2), pp. 125-135.
Valentina Assenova and Emily Erikson, “New Forms of Organization and the Coordination of Political and Commercial Actors”. In Chartering Capitalism: Organizing Markets, States, and Publics (Political Power and Social Theory, Volume 29, edited by Emily Erikson, (2015), pp. 1-13
Peter Aronow, Cyrus Samii, Valentina Assenova (2015), Cluster Robust Variance Estimation for Dyadic Data, Political Analysis, 24 (4), pp. 564-577.
This is a course on creating a business to attack a social problem and thereby accomplish both social impact and financial sustainability. For this course, social entrepreneurship is defined as entrepreneurship used to profitably confront social problems. This definition therefore views social entrepreneurship as a distinct alternative to public sector initiatives. The basic thesis is that many social problems, if looked at through an entrepreneurial lens, create opportunity for someone to launch a venture that generates profits by alleviating that social problem. This sets in motion a virtuous cycle - the entrepreneur is incented to generate more profits and in so doing, the more the profits made, the more the problem is alleviated. Even if it is not possible to eventually create a profit-making enterprise, the process of striving to do so can lead to a resource-lean not-for-profit entity. Creating a profitable social entrepreneurship venture is by no means a simple challenge. It involves deeply understanding how to prioritize a multi-mission entity, how to analyze and engage traditional agencies, how to formulate political strategies to develop influence and social assets in target beneficiary markets, how to forge negotiating strategies for securing resources, how to capture publicity for the enterprise, and generally how to minimize resource requirements. Students in teams will develop a PowerPoint deck proposing a social enterprise start up using the tools and principles of the course. Format: Lecture, discussion, live case studies (discussions of progress reports of students own ventures), nation-boosting presentations.
MGMT 230 integrates the material introduced in business fundamental courses and applies it to the design and evaluation of new ventures. The purpose of this course is to explore the many dimensions of new venture creation and growth and to foster innovation and new business formations in independent and corporate settings. The course addresses both a theoretical perspective on venture initiation and the application of writing an actual business plan. In this course you are asked to get out of the habit of being a receiver of ideas, facts, concepts and techniques, and get into the habit of generating ideas, identifying problems, analyzing and evaluating alternatives, and formulating workable action plans, thus putting textbook knowledge into practice. Students will get this hands-on experience in the following ways: Through the formation and ongoing work of venture teams that will design a comprehensive business development plan for a particular start-up company. Teams are expected to utilize the tools and analytical approaches discussed in class to their venture, through simulations, labs, lectures and class discussions that are designed to familiarize students with the many dimensions of entrepreneurship and new venture initiation. Class format varies throughout the course. In some class sessions, there will be a lecture on specific topics. Other sessions will consist of live simulations, labs, in-class exercises, and discussions of a particular topic or venture ideas that students are developing. Guest speakers will also lead and participate in some class sessions.
This is a course on creating a business to attack a social problem and thereby accomplish both social impact and financial sustainability. For this course, social entrepreneurship is defined as entrepreneurship used to profitably confront social problems. This definition therefore views social entrepreneurship as a distinct alternative to public sector initiatives. The basic thesis is that many social problems, if looked at through an entrepreneurial lens, create opportunity for someone to launch a venture that generates profits by alleviating that social problem. This sets in motion a virtuous cycle - the entrepreneur is incented to generate more profits and in so doing, the more the profits made, the more the problem is alleviated. Even if it is not possible to eventually create a profit-making enterprise, the process of striving to do so can lead to a resource-lean not-for-profit entity. Creating a profitable social entrepreneurship venture is by no means a simple challenge. Cross-listed with MGMT 212.
New Wharton research examines which kinds of innovations spread more quickly than others in different networks, the role of influencers, and what that means for entrepreneurs.Knowledge @ Wharton - 2018/05/14