Entrepreneurs Who Take Funding From Close Family and Friends Are More Likely to Pursue Lower-Risk Growth Options

Entrepreneurs often lack resources and funding needed to launch a venture and reach out to family and friends for initial support. But is it always good for a startup when individuals close to the founder are asked if they want to “be on the ground floor of something good?” New research from three Indiana University Kelley School of Business professors finds that such close ties to investors can lead founders to make more conservative venture growth decisions and make them more hesitant to take risks.

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