external investors to convey information about their quality. We examine the potential for technology startups to use patents … and founders, friends and family money (FFF money) as signals to attract business angel and venture capital funds, patents … (less) than founder commitment, the optimal mix of signals is a relatively higher (lower) use of patents than FFF money …

investor preferences. For a novel sample of technology incubator startups, we empirically examine the use of patents and … business angel investment in the startups. For this sample, venture capitalists appear to value patents more highly than FFF … money, while the reverse is true for business angels. Moreover, the impact of patents on venture capitalists is larger than …