Access to private capital · Original source
Livia Boerner; Thomas Fritz; Bernd Frick
The high-risk decision environment and information asymmetries associated with investing in early-stage startups in pitch competitions make angel investors prone to biased decision-making. Drawing from social perception theory, this study examines how angel investors’ decisions are influenced by observed personal characteristics of entrepreneurial teams, based on representative stereotypes. Analyzing a dataset of N = 553 startup pitches from the German televised competition Die Höhle der Löwen, this study reveals that the likelihood of securing deals with German angel investors and the resulting business valuations are linked to certain superficial team characteristics. Specifically, the age, diverse ethnicity, and physical attractiveness of the entrepreneurial team have a significant positive effect on deal probabilities. Moreover, angel investors offer lower deal valuations to teams of older and female entrepreneurs, suggesting the presence of a systematic bias. These insights contribute to understanding the role of stereotypes in entrepreneurial finance and address the challenges related to bias in access to capital for early-stage startups in Germany.
Access to private capital · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Boerner, Fritz and Frick analyze 553 startup pitches on a German televised competition and associate observable team characteristics with deal probabilities and valuations. The study raises a practical concern for family offices attending pitch events: an engaging performance can shape a decision before ordinary diligence begins. Its television setting is not representative of every private-capital transaction. This companion therefore proposes a process safeguard rather than a claim that particular characteristics predict business performance or that anonymization can solve every evaluation problem.
Access to private capital · Original source
Simon Kleinert; Kazem Mochkabadi
Equity crowdfunding has the potential to democratize entrepreneurial finance and provide female entrepreneurs with new and equal access to early-stage financing. In this paper, we present first empirical evidence on gender stereotypes in the context of technology ventures in equity crowdfunding. Drawing on signaling and gender role congruity theory, we hypothesize that quality signals have different effects depending on whether they are sent by male or female entrepreneurs. Results taken from a sample of 263 equity crowdfunding campaigns run by technology ventures confirm our hypotheses. In line with gender stereotypes, management experience is beneficial for male entrepreneurs but detrimental for female entrepreneurs. Interestingly, media coverage as a third-party signal has the oppositive effect, being more effective for female entrepreneurs.
Access to private capital · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Kleinert and Mochkabadi study 263 technology crowdfunding campaigns and report that the association between quality signals and funding differs by founder gender. Management experience and media coverage do not operate uniformly in their sample. The practical lesson for a family office is not to substitute press coverage for diligence. It is to examine how an evaluator translates the same kind of evidence into a judgment about capability. This companion proposes a calibration exercise for committees that invest in early-stage businesses.
Access to private capital · Original source
Udichibarna Bose; Stefano Filomeni; Elena Tabacco
Gender bias in leadership and decision-making is a well-documented and pervasive topic that continues to garner significant attention in academic research and business literature. In this paper, by exploiting a unique proprietary dataset of 550 mid-corporate loan applications managed by a major European bank, we explore how the use of soft information influences lending decisions of female loan officers as compared to their male counterparts. We find that use of soft information reduces information asymmetry which helps female officers in making diligent lending decisions resulting in increased granted credit with a lower default probability. We also investigate gender affinity within the banking organisation and find that female loan approvers are more likely to be supportive of their subordinate female loan officers by approving more credit to the loan applications handled by female loan officers. Finally, we examine the possible mechanisms that can explain these results, and find that female loan officers are able to better collect and use soft information as they cultivate and maintain deeper firm-bank relationships with their clients due to higher threat of losing or being penalized in their jobs for any possible errors. We also rule out any other possible explanations such as differences in workload, work experience, loan officers’ optimism, managerial ability, and screening capabilities between female and male loan officers. Our findings carry important policy implications, reflected in the optimal allocation of capital in the economy and the reduction of gender-related exclusion, which is vital in creating an equitable society and fostering a more ethical and inclusive workplace.
Access to private capital · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Bose, Filomeni and Tabacco study 550 mid-corporate loan applications at a European bank and examine how soft information relates to lending decisions and outcomes. Their analysis includes gender relationships within the lending organization. It does not show that every woman lender has an inherent advantage or that a family office can replace financial analysis with personal trust. The practical question is how useful relationship knowledge can enter a credit decision without becoming an unchallengeable judgment about a borrower or a lender.
Access to private capital · Original source
Malin Malmström; Barbara Burkhard; Charlotta Sirén; Dean Shepherd; Joakim Wincent
This meta-analysis of 31 studies over 20 years advances our understanding of the gender gap in entrepreneurial bank finance. Findings from previous research on the relationship between entrepreneurs’ gender and bank financing are mixed, which suggests the need to pay particular attention to entrepreneurs’ social context. In this study, we develop a model of how social gender norms explain variation in women entrepreneurs’ (vis-à-vis men entrepreneurs’) access to bank finance. Specifically, we theorize how women’s formal (their nations’ political ideologies) and informal (women’s empowerment) social standing within their societies influence gender discrimination in entrepreneurial bank financing. Consistent with most previous studies, our baseline results show that women entrepreneurs’ business loan applications are rejected to a greater extent than men entrepreneurs’ loan applications. Women entrepreneurs also pay higher interest rates on loans than men entrepreneurs. Further, in societies dominated by a conservative (rather than a liberal) political ideology, the positive relationship between women entrepreneurs and loan interest rates is more positive. Interestingly, gender discrimination in loan rejection and interest rates is magnified in societies with greater women’s empowerment. Taking a social gender-norm perspective, our analysis establishes a gender gap in entrepreneurial bank finance, and we outline an agenda for further research.
Access to private capital · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Malmström and colleagues synthesize 31 studies of entrepreneurial bank finance and find an overall disadvantage for women entrepreneurs in loan rejection and pricing, with variation across social contexts. This does not establish that every rejected application is discriminatory or that a family office should override normal credit standards. It does support asking whether portfolio companies encounter consistent, explainable lending requirements. This companion proposes a credit-access audit that distinguishes business risk, application quality and potentially unequal treatment.
Digital finance & investor participation · Original source
Pomme Theunissen; Matteo Millone
Crowdfunding is a growing source of finance for entrepreneurs. In this paper, we investigate the existence of a gender effect in the time needed to obtain a business loan through crowdfunding. Using data from three Dutch crowdfunding platforms, survival analysis of the time to completion for 934 business loan campaigns shows that female entrepreneurs have a 20% shorter campaign completion time compared to male entrepreneurs, whereas couples do not differ from males. This effect persists across the different platforms. Subsequent analysis shows that female entrepreneurs do not have the disadvantage they face in traditional lending channels when requesting funds through crowdfunding, and that herding behavior by investors benefits female entrepreneurs most.
Digital finance & investor participation · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
For a family office considering private lending or a crowdfunding allocation, the immediate question is not whether women are universally better borrowers. It is whether the office has confused a campaign's popularity with evidence of repayment capacity. Theunissen and Millone examine 934 business-loan campaigns across three Dutch platforms and find faster completion for women entrepreneurs. Their result concerns funding speed and investor participation, not a universal credit-performance premium. This companion proposes a review that separates market reception from underwriting quality and treats differences in participation as a question for investigation.
Digital finance & investor participation · Original source
Jörg Prokop; Dandan Wang
Compared to their male peers, female entrepreneurs tend to face greater obstacles in raising venture funding from business angels, venture capitalists, and financial institutions. In this paper, we investigate whether this gender gap also exists in equity crowdfunding. Based on data from the German equity crowdfunding market, we find that ventures with and without female managing directors are equally successful in raising capital when launching their first equity crowdfunding campaign. In contrast, the former are significantly less successful than their peers in seasoned equity crowdfunding campaigns, and this disparity cannot be fully explained by differences in other venture-related or entrepreneur-related characteristics. However, we also find that the gender gap in seasoned offerings narrows if female entrepreneurs set more ambitious funding thresholds. Overall, our results indicate that pitching their equity crowdfunding campaigns in a more promotion-oriented way is a sensible strategy for female entrepreneurs to improve funding success.
Digital finance & investor participation · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Prokop and Wang distinguish first-time from seasoned equity crowdfunding campaigns in Germany. Their results show that apparent parity in initial fundraising can coexist with disadvantage in subsequent offerings. The family-office implication is a question rather than a universal rule: does an inclusive entry process remain inclusive when companies return for more capital? This companion proposes a follow-on review that examines evidence, valuation and capital need consistently without treating founder gender as a proxy for quality or assuming that a larger funding request improves outcomes.
Digital finance & investor participation · Original source
Dandan Wang; Jörg Prokop
We investigate gender-specific local biases among investors in equity crowdfunding. Based on data from a major German crowdfunding platform, we find that domestic investors favour ventures that are geographically closer to their own place of residence. This bias is particularly evident among female investors, although it is partially offset by gender homophily, whereby female investors favour companies with women in the top management team. Finally, we show that the introduction of the German Small Investor Protection Act may have exacerbated local biases in the German crowdfunding market, particularly with respect to firms with female management. Overall, our results suggest that establishing their companies in close proximity to a large number of potential female crowd investors may help improve female entrepreneurs’ chances of attracting equity crowdfunding investment.
Digital finance & investor participation · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Wang and Prokop examine investment decisions on a German equity-crowdfunding platform and report local bias alongside gender-related patterns of investor preference. Their evidence concerns one financing environment, not a universal description of women investors. For a family office, it motivates a useful diagnostic: does the sourcing network limit which businesses receive consideration, and are geographic familiarity and relevant local knowledge being treated as the same thing? This companion proposes an audit that can expose the distinction without assuming that distant investments are necessarily better.
Digital finance & investor participation · Original source
Ali Mohammadi; Kourosh Shafi
This paper is an exploratory attempt to understand gender-related differences in the behavior of investors in firms seeking equity financing. Using data from the Swedish equity crowdfunding platform FundedByMe, we find that female investors are less likely to invest in the equity of firms that are younger and high tech and have a higher percentage of equity offerings. This pattern seems consistent with a greater risk aversion in female versus male investors. Furthermore, female investors are more likely to invest in projects in which the proportion of male investors is higher.
Digital finance & investor participation · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Mohammadi and Shafi examine gender-related participation patterns on a Swedish equity-crowdfunding platform. They observe differences in the kinds of ventures selected and in the relationship between prior investors and later participation. Such aggregate patterns should not be converted into assumptions about an individual family member's risk tolerance or competence. This companion proposes an investment-learning process that elicits each person's objectives, makes social influence visible and gives participants a way to practice judgment before committing substantial capital.
Financial agency across generations · Original source
Shohei Okamoto; Kohei Komamura
Financial knowledge, confidence and reported conduct differ across age and gender in a Japanese survey.
Financial agency across generations · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Distinguish knowledge, confidence and conduct in a voluntary financial-learning process tied to meaningful decisions.
Financial agency across generations · Original source
Karla Cordova; Markus M. Grabka; Eva Sierminska
We examine the gender wealth gap with a focus on pension wealth and statutory pension rights. By taking into account employment characteristics of women and men, we are able to identify the extent to which the redistributive effect of pension rights reduces the gender wealth gap. The data for our analysis come from the German Socio-Economic Panel (SOEP), one of the few surveys that collects information on wealth and pension entitlements at the individual level. Pension wealth data are available in the SOEP for 2012 only. While the relative raw gender wealth gap is about 35% (or 31,000 euros) when analysing the standard measure of net worth, it shrinks to 28% when pension wealth is added. This reduction is due to redistributive elements such as caregiver credits provided through the statutory pension scheme. Results of a recentred influence functions (RIF) decomposition show that pension wealth reduces the gap substantially in the lower half of the distribution. At the 90th percentile, the gender wealth gap in net worth and in augmented wealth remains more stable at roughly 27–30%.
Financial agency across generations · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Complement the consolidated balance sheet with an individual record of ownership, control, retirement rights and liquidity.
Financial agency across generations · Original source
Li Jia; Wenjing Lei; Gerrit Antonides
This study investigates the effect of women’s bargaining power on household stock investment. Using data from the 2019 wave of the China Household Finance Survey (CHFS), this study finds that women’s bargaining power within the household was positively related to household stock investment. Specifically, we explored the mediating effects of financial information attention and the moderating effects of risk preference and financial literacy on the relationship between women’s bargaining power and household stock investment. The results show that women's bargaining power improved household stock investment indirectly by increasing the spouses’ attention to economic and financial information. We also find that wives’ risk preference and financial literacy intensified the positive effect of women’s bargaining power on household stock investment. The positive relationship between women’s bargaining power and household stock investment was relatively strong for below-median wealthy households. In addition, the effect of women’s bargaining power on household stock investment intensified with the increasing age of the wives. A discussion of the results and implications for policy making are included.
Financial agency across generations · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Make each adult’s financial voice, information access and delegated authority explicit without prescribing portfolio risk.
Financial agency across generations · Original source
Oscar A. Stolper; Andreas Walter
In this survey, we review the voluminous body of literature on the measurement and the determinants of financial literacy. Wherever possible, we supplement existing findings with recent descriptive evidence of German households’ financial literacy levels based on the novel Panel on Household Finances dataset, a large-scale survey administered by the Deutsche Bundesbank and representative of the financial situation of households in Germany. Prior research not only documents generally low levels of financial literacy but also finds large heterogeneity in financial literacy across the population, suggesting that economically vulnerable groups are placed at further disadvantage by their lack of financial knowledge. In addition, we assess the literature evaluating financial education as a means to improve financial literacy and financial behavior. Our survey suggests that the evidence with respect to the effectiveness of the programs is rather disappointing. We also review the role of individuals’ financial literacy for the use of professional financial advice and assess whether expert intervention can serve as a substitute to financial literacy. We conclude by discussing several directions for future research.
Financial agency across generations · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Turn financial education into stronger questions, transparent advice records and accountable professional service.
Liquidity, debt & the freedom to wait · Original source
Dorinth W. van Dijk; Marc K. Francke
Abstract We examine co-movements in private commercial real estate index returns and market liquidity in the US (apartment, office, retail) and for eighteen global cities, using data from Real Capital Analytics over the period 2005–2018. Our measure of market liquidity is based on the difference between supply and demand price indexes. We document for all analyzed markets much stronger commonalities in changes in market liquidity compared to commonalities in real price index returns. We further provide empirical evidence that space markets are less integrated than capital markets by analyzing co-movements in net-operating-income and cap rate spreads (over similar maturity bond yields). In a theoretical simulation model, we show that the strong integration of capital markets compared to space markets, is in fact the reason why market liquidity co-moves so strongly compared to returns. Our results are of interest for large private real estate investors such as pension funds and other institutional investors who are interested in spreading risk. Our findings imply that fully diversified price return benefits may be difficult to obtain, because market liquidity may dry up in all markets simultaneously, which makes portfolio re-balancing more difficult and costly.
Liquidity, debt & the freedom to wait · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Property diversification and funding resilience answer different questions. This companion translates van Dijk and Francke’s evidence on common movements in commercial-property liquidity into a governance protocol for family offices. It proposes separate registers for asset value, executable liquidity and family commitments, with explicit scenarios and decision ownership. The protocol is an original practice framework, not a tested intervention or a recommendation to buy, sell or borrow.
Liquidity, debt & the freedom to wait · Original source
David H. Downs; Chen Zheng; Bing Zhu
Abstract We examine whether property market liquidity impacts the choice between secured and unsecured debt. A sample of real estate investment trusts (REITs) allows us to estimate the market liquidity of a REIT’s underlying assets and the debt secured by those assets (or unsecured). Using an instrumental variables approach, we find a positive relationship between a REIT’s property market liquidity and its use of unsecured debt relative to secured debt - when a REIT has greater exposure to more liquid underlying property markets, it is more likely to rely on unsecured debt. We investigate several aspects of this relationship including the debt level, issuances, and property loan-to-value ratio. In each case, we find support for our main result. Likewise, our results are robust to (a) using alternative instruments; (b) controlling for REITs’ unencumbered assets, as well as asset quality and redeployability; (c) controlling for credit market conditions; (d) accounting for real estate market conditions; (e) excluding firms that focus on residential real estate; and (f) adding stock market liquidity. Our study highlights the importance of property market liquidity in the debt structure of REITs.
Liquidity, debt & the freedom to wait · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
A debt total cannot reveal every constraint a property owner faces. Downs, Zheng and Zhu connect underlying property-market liquidity with secured versus unsecured borrowing among REITs. This companion uses that finding to develop a family-office financing map that distinguishes contractual obligations, collateral restrictions, decision rights and assumptions about market access. It is a governance framework, not evidence that one debt instrument is best or that REIT financing results directly determine family-office policy.
Climate exposure & the second life of property · Original source
Jesse D. Gourevitch; Carolyn Kousky; Yanjun (Penny) Liao; Christoph Nolte; Adam B. Pollack; Jeremy R. Porter; Joakim A. Weill
Abstract Climate change impacts threaten the stability of the US housing market. In response to growing concerns that increasing costs of flooding are not fully captured in property values, we quantify the magnitude of unpriced flood risk in the housing market by comparing the empirical and economically efficient prices for properties at risk. We find that residential properties exposed to flood risk are overvalued by US$121–US$237 billion, depending on the discount rate. In general, highly overvalued properties are concentrated in counties along the coast with no flood risk disclosure laws and where there is less concern about climate change. Low-income households are at greater risk of losing home equity from price deflation, and municipalities that are heavily reliant on property taxes for revenue are vulnerable to budgetary shortfalls. The consequences of these financial risks will depend on policy choices that influence who bears the costs of climate change.
Climate exposure & the second life of property · Solutions companion
Family Office Private Wealth Journal · Editorial research desk
Long ownership horizons make climate exposure a continuing governance problem. Building on Gourevitch and colleagues’ analysis of unpriced flood risk in United States housing, this companion proposes an evidence file connecting physical hazards, cash-flow channels, insurance terms and local public services. Its purpose is to improve the quality of family decisions and communication. It does not calculate a property’s fair value, prescribe geographic allocations or predict when prices will adjust.