Washington, Apr 9 : A strong business plan and a strong management team is what lures an investor towards a start-up company, say researchers.
Lead researchers Steven N. Kaplan, Berk A. Sensoy, and Per Stromberg looked at 50 start-ups that went public in an initial public offering for which there was a very early business plan.
The second sample included all start-ups that went public in 2004.
The researchers say that strong management no doubt is important, but ultimately a strong business idea matters most to investors.
The team found that a bad management team does not necessarily kill a good idea, but a good management rarely overcomes a bad idea.