IKEA effect in relations between start-ups and investors

The IKEA effect is the phenomenon of unconscious increasing of the valuation of objects as a result of physical or intellectual effort exerted in the past to create these objects. The article considers possible impact of this effect on the relations between startups and the investors who finance the...

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Main Author: Mateusz Codogni
Format: Article
Language:English
Published: Military University of Technology, Warsaw 2019-06-01
Series:Nowoczesne Systemy Zarządzania
Subjects:
Online Access:https://nsz.wat.edu.pl/Efekt-IKEA-w-relacjach-nmiedzy-start-upami-a-inwestorami,129534,0,2.html
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author Mateusz Codogni
author_facet Mateusz Codogni
author_sort Mateusz Codogni
collection DOAJ
description The IKEA effect is the phenomenon of unconscious increasing of the valuation of objects as a result of physical or intellectual effort exerted in the past to create these objects. The article considers possible impact of this effect on the relations between startups and the investors who finance them. It contains a description of the phenomenon itself, a summary of selected empirical studies confirming its existence and a brief description of possible explanations for the occurrence of the phenomenon. It then considers how the described effect may distort the assessment of the company’s value in the eyes of its founder and the investor financing it. The conclusions include suggestions regarding the practical implications of the problem in the process of cooperation between a start-up and an investor.
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spelling doaj.art-377d6bf684564403aec47d0aa254abb42022-12-22T03:40:52ZengMilitary University of Technology, WarsawNowoczesne Systemy Zarządzania1896-93802719-860X2019-06-01142536310.37055/nsz/129534129534IKEA effect in relations between start-ups and investorsMateusz Codogni0https://orcid.org/0000-0002-3775-1567Akademia Górniczo-Hutnicza w Krakowie, Wydział ZarządzaniaThe IKEA effect is the phenomenon of unconscious increasing of the valuation of objects as a result of physical or intellectual effort exerted in the past to create these objects. The article considers possible impact of this effect on the relations between startups and the investors who finance them. It contains a description of the phenomenon itself, a summary of selected empirical studies confirming its existence and a brief description of possible explanations for the occurrence of the phenomenon. It then considers how the described effect may distort the assessment of the company’s value in the eyes of its founder and the investor financing it. The conclusions include suggestions regarding the practical implications of the problem in the process of cooperation between a start-up and an investor.https://nsz.wat.edu.pl/Efekt-IKEA-w-relacjach-nmiedzy-start-upami-a-inwestorami,129534,0,2.htmlikea effectstart-upventure capitalseed capital
spellingShingle Mateusz Codogni
IKEA effect in relations between start-ups and investors
Nowoczesne Systemy Zarządzania
ikea effect
start-up
venture capital
seed capital
title IKEA effect in relations between start-ups and investors
title_full IKEA effect in relations between start-ups and investors
title_fullStr IKEA effect in relations between start-ups and investors
title_full_unstemmed IKEA effect in relations between start-ups and investors
title_short IKEA effect in relations between start-ups and investors
title_sort ikea effect in relations between start ups and investors
topic ikea effect
start-up
venture capital
seed capital
url https://nsz.wat.edu.pl/Efekt-IKEA-w-relacjach-nmiedzy-start-upami-a-inwestorami,129534,0,2.html
work_keys_str_mv AT mateuszcodogni ikeaeffectinrelationsbetweenstartupsandinvestors