We study a model of network formation and start-up financing with endogenous entrepreneurial type distribution. A hub firm admits members to its network based on signals about entrepreneurs' types. Network membership is observable, which allows lenders to offer different interest rates to...

We draw upon resource-based and sociological theories to shed light on nascent entrepreneurs' network development. Employing a unique empirical dataset of nascent entrepreneurs at the earliest stages of venture creation, we examine resource search and homophily as two antecedents of...