Startup Funding Espresso Disposition Effect
Disposition Effect Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. Disposition effect is a cognitive bias defined by Wikipedia\xa0as the tendency to sell an asset that has accumulated in value and resist selling an asset that has declined in value. Investors find it difficult to sell startup investments since they are no longer growing but hold the promise of \u201ccoming back.\u201d Investors fund many startups most of which will not return the original value. Many investors hold onto the investment with the hope that they eventually will achieve success.\xa0\xa0 Investors should review their portfolio of investments to determine which ones have a strong enough case to continue. For those startups that don\u2019t have a case, the investor should explore selling out of the deal. In follow-on fundraises, the investor could look for someone to take their place and buy them out.\xa0 Another path is to write redemption clauses into the investment documents so the investor has a choice about leaving the deal. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .