Research from Dr. Mark Bolinger, a professor of management in Appalachian State University's Walker College of Business, was recently featured in a Knowridge.com article, How entrepreneurs can share risks without scaring investors.
In partnership with fellow researchers Katrina M. Brownell (Virginia Polytechnic Institute) and Jeffrey G. Covin (University of Wyoming), Bolinger's findings give entrepreneurs a strategy for startups to build credibility while securing the support they need to grow.
Entrepreneurs often face a tough decision: Should they be honest about the risks of their business, or keep quiet to avoid scaring off investors?
While transparency builds trust, it can also make investors hesitant. A new study in the Strategic Entrepreneurship Journal offers a solution. [The researchers] found that entrepreneurs who disclose risks in a smart way can actually attract more investors.
“Our findings show that honesty about risks doesn’t have to scare investors away,” says lead author Mark T. Bolinger. “Instead, pairing transparency with evidence of preparedness can strengthen investor trust and improve funding outcomes.”
The article provides the following guidance for entrepreneurs looking to raise funds:
- Acknowledge Risks: Be upfront about potential challenges your business might face.
- Present Solutions: Explain the steps you’re taking to reduce these risks and why they won’t harm your success.
- Show Confidence: Demonstrate that you have a clear plan and the skills to handle obstacles.
About Faculty Research in the Walker College of Business
Appalachian State University's Walker College of Business faculty produce and disseminate extensive research through both academic and professional communities. In the last five years, faculty have published 543 peer-reviewed academic journal articles, 160 conference proceedings, and made 533 conference and professional presentations. In total, faculty have produced 1,175 intellectual contributions in the last five years. Approximately 520 intellectual contributions were made in basic or discovery research, 540 in applied or integrative research, and 115 contributions in teaching and learning research. Learn more at https://business.appstate.edu/faculty/research.
About App State's Department of Management
The Department of Management offers undergraduate and graduate degree programs to prepare students for various managerial responsibilities in today's dynamic environment. The student who is studying management will acquire relevant knowledge and skills necessary for success in a variety of small, medium, and large organizations. The department offers two undergraduate Bachelor of Science in Business Administration degree programs: the major in Management and the major in Hospitality and Tourism Management. The department also offers minors for both business and non-business majors in entrepreneurship, human resource management, and sustainable business. At the graduate level, the Industrial-Organizational Psychology and Human Resource Management (IOHRM) program is an interdisciplinary Master of Arts degree program offered jointly by the Department of Management and the Department of Psychology. Learn more at management.appstate.edu.
Dr. Mark Bolinger
