Prior research often assumes that stronger founder human capital uniformly increases a startup’s likelihood of securing external financing. This study aims to examine whether this assumption holds in emerging markets where educational and professional credentials originate from institutionally diverse systems of validation.
Using startup-year panel data on early-stage investments in Türkiye between 2016 and 2024, the author analyzes how investors evaluate three founder categories based on the institutional origin of their educational background: returnees from developed countries, returnees from other countries and local elite founders.
Returnees from developed countries are most likely to obtain early-stage funding, particularly when prior work experience in the home country reduces concerns about local embeddedness. Returnees from other countries show a negative but less robust association with funding likelihood, though they benefit from affiliations with venture development organizations, which help mitigate ambiguity about their credentials.
The findings suggest that under conditions of institutional heterogeneity, investors do not evaluate founder human capital as a simple accumulation of credentials. Instead, capital allocation reflects category-based evaluation processes in which founder backgrounds activate distinct uncertainty profiles.
