{ "docId": "019f6b8f-71b9-7767-8357-69b177d37fb3", "docSlug": "jarvis-throne-vs-the-kingdom", "documentTitle": "Throne vs the kingdom", "authorId": "throne-vs-the-kingdom", "authorName": null, "documentKindSlug": "deck", "documentKindLabel": "Deck", "sourceTypeSlug": "investor_relations", "sourceTypeLabel": "Investor relations", "presentationDate": null, "orientation": null, "aspectRatio": null, "pageNumber": 21, "pageCount": 45, "prevPage": 20, "nextPage": 22, "slideType": "appendix_methodology", "function": "analyze_data", "density": "dense", "nDataPoints": 0, "notes": "The text describes variables related to founder experience, team composition, executive quality, financing sources, board size, and geographic location.", "elementsJson": null, "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019f6b8f-71b9-7767-8357-69b177d37fb3/21", "deckHref": "/decks/019f6b8f-71b9-7767-8357-69b177d37fb3", "deckJsonHref": "/decks/019f6b8f-71b9-7767-8357-69b177d37fb3.json", "deckAnchorHref": "/decks/019f6b8f-71b9-7767-8357-69b177d37fb3#slide-21", "components": [ { "bbox": { "h": 0.05, "w": 0.77, "x": 0.117, "y": 0.85 }, "kind": "other", "text": "20 Startups give equity stakes in order to attract executive hires, align their incentives, and heighten the sense of ownership (see Rousseau and Shperling 2003). In addition, because they typically must conserve their cash, they often include equity stakes in the compensation package in order to be able to pay lower salaries.", "attrs": null, "subkind": "source-note", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "286253f8-2c3b-4b65-bc8c-8933513d175d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.77, "x": 0.117, "y": 0.8 }, "kind": "other", "text": "19 I used five criteria to assess whether a founder was the “core founder”: Which founder was the initial CEO, which founder had the initial idea, which founder held the largest equity stake, which founder contributed the most seed capital, and whether the founder was a full-time employee at time of founding.", "attrs": null, "subkind": "source-note", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f5a7b4ca-fe5b-4e6a-827a-e936d1d4548e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.77, "x": 0.117, "y": 0.093 }, "kind": "paragraph", "text": "capital as of the time of the survey, I added 1 to the capital-raised metric before taking its natural logarithm. To account for missing data in the survey, I used multiple-imputation methods (Rubin 1987).", "attrs": null, "subkind": "description", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "36ccf759-2071-474a-ad08-0c2e339b3913", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.65, "w": 0.77, "x": 0.117, "y": 0.16 }, "kind": "paragraph", "text": "Regarding independent variables, the models include an indicator of whether the core founder had prior founding experience and whether the core founder tapped social networks to attract executive hires, while controlling for the core founder’s years of prior work experience.19 For the founding team, the models include the size of the founding team and the founding team’s total years of prior work experience. Value may also be affected by the founders’ initial capital investments in the startup, which I aggregate across the founding team. I include three aspects for non-founding executives: their years of prior work experience, the number of executives who in prior work were the senior-most executives within their functions, and the average compensation of the executives (as another metric of the quality of the executives). I also control for the executives’ equity stakes.20 The amount of capital raised may be affected by the source of financing – the founders themselves, angel investors, or venture capitalists – so I include dummy variables for each of those three sources. Larger boards of directors can add more resources, but can also be less effective because of diffused responsibility, because of increased agency problems (e.g., free riding by directors), or because the board becomes more symbolic than effective (e.g., Jensen 1993; Yermack 1996; Eisenberg, Sundgren et al. 1998). Therefore, I also controlled for the size of the board, allowing for curvilinear effects on value creation. Regarding the startup’s location, more valuable ventures may be created in startup “hubs” that have plentiful startup resources, so I controlled for whether the startup is located in a hub (i.e., CA or MA, the hubs of the American startup scene), a secondary market (IL, NJ, NY, or TX), or in smaller", "attrs": null, "subkind": "description", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "eee3ee8f-8490-449c-bf54-f87a36466ed9", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [], "arcBeats": [ { "to": 28, "from": 16, "beatId": "6ab56db9-5500-45bd-902c-6cf5d17f6a2f", "arcName": "The Sequoia Pitch", "arcSlug": "sequoia-pitch", "beatName": "Solution", "beatSlug": "sequoia-pitch-solution", "evidence": "The document presents the results of the analysis and discusses the implications.", "position": 2, "confidence": 0.8, "parentBeatName": "Turn", "parentBeatSlug": "turn" } ], "loops": [ { "to": 30, "from": 20, "name": "Hypothesis Test", "slug": "42-hypothesis-test", "bestFor": "Strategy validation, due diligence, research presentations", "matchId": "9b8f41c3-6897-4fd9-a364-175680d0cf85", "evidence": "The document presents statistical analysis and results.", "position": 1, "objective": "Testing hypotheses about the relationship between founder control and value creation", "structure": "The Hypothesis -> Test 1 (Supports/Refutes) -> Test 2 (Supports/Refutes) -> Conclusion (Validated/Pivoted)", "confidence": 0.7, "description": "State a hypothesis upfront, then systematically prove or disprove it with evidence" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }