---
_id: '20869'
abstract:
- lang: eng
  text: This study provides evidence of significant biases in multi-year management
    forecasts by analyzing a proprietary dataset on venture-backed start-ups in Germany.
    We find that revenues and expenses are highly overestimated in each of the investigated
    one- to five-year-ahead planning periods. Furthermore, entrepreneurs underestimate
    one-year-ahead profit forecasts but clearly overestimate their profit forecasts
    for all longer-term forecast horizons. Additional analyses reveal that teams with
    prior management experience issue even more overestimated forecasts and misrepresent
    their forward-looking information. In contrast, greater asset verifiability and
    corporate lead investors are associated with lower levels of forecast errors.
    All key results hold if bias is either measured by traditionally comparing forecasts
    to ex-post realizations or by using a cross-sectional projection approach based
    on historical accounting data developed by prior research.
author:
- first_name: Sönke
  full_name: Sievers, Sönke
  id: '46447'
  last_name: Sievers
- first_name: Christopher Frederik
  full_name: Mokwa, Christopher Frederik
  last_name: Mokwa
citation:
  ama: 'Sievers S, Mokwa CF. <i>Biases in Management Forecasts of Venture-Backed Start-Ups:
    Evidence from Internal Due Diligence Documents of VC Investors</i>.; 2012. doi:<a
    href="https://doi.org/10.2139/ssrn.1714399">10.2139/ssrn.1714399</a>'
  apa: 'Sievers, S., &#38; Mokwa, C. F. (2012). <i>Biases in Management Forecasts
    of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of
    VC Investors</i>. <a href="https://doi.org/10.2139/ssrn.1714399">https://doi.org/10.2139/ssrn.1714399</a>'
  bibtex: '@book{Sievers_Mokwa_2012, title={Biases in Management Forecasts of Venture-Backed
    Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors}, DOI={<a
    href="https://doi.org/10.2139/ssrn.1714399">10.2139/ssrn.1714399</a>}, author={Sievers,
    Sönke and Mokwa, Christopher Frederik}, year={2012} }'
  chicago: 'Sievers, Sönke, and Christopher Frederik Mokwa. <i>Biases in Management
    Forecasts of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents
    of VC Investors</i>, 2012. <a href="https://doi.org/10.2139/ssrn.1714399">https://doi.org/10.2139/ssrn.1714399</a>.'
  ieee: 'S. Sievers and C. F. Mokwa, <i>Biases in Management Forecasts of Venture-Backed
    Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors</i>.
    2012.'
  mla: 'Sievers, Sönke, and Christopher Frederik Mokwa. <i>Biases in Management Forecasts
    of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of
    VC Investors</i>. 2012, doi:<a href="https://doi.org/10.2139/ssrn.1714399">10.2139/ssrn.1714399</a>.'
  short: 'S. Sievers, C.F. Mokwa, Biases in Management Forecasts of Venture-Backed
    Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors, 2012.'
date_created: 2021-01-05T11:52:51Z
date_updated: 2022-01-06T06:54:41Z
doi: 10.2139/ssrn.1714399
extern: '1'
jel:
- G24
- G32
- M13
- M41
keyword:
- Management forecasts
- Forecasting biases
- Venture-backed start-ups
- Projection methods
language:
- iso: eng
main_file_link:
- url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1714399
page: '42'
publication_status: published
status: public
title: 'Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from
  Internal Due Diligence Documents of VC Investors'
type: working_paper
user_id: '46447'
year: '2012'
...
---
_id: '5198'
abstract:
- lang: eng
  text: 'This study provides evidence of significant biases in multi-year management
    forecasts by analyzing a proprietary dataset on venture-backed start-ups in Germany.
    We find that revenues and expenses are highly overestimated in each of the investigated
    one- to five-year-ahead planning periods. Furthermore, entrepreneurs underestimate
    one-year-ahead profit forecasts but clearly overestimate their profit forecasts
    for all longer-term forecast horizons. Additional analyses reveal that teams with
    prior management experience issue even more overestimated forecasts and misrepresent
    their forward-looking information. In contrast, greater asset verifiability and
    corporate lead investors are associated with lower levels of forecast errors.
    All key results hold if bias is either measured by traditionally comparing forecasts
    to ex-post realizations or by using a cross-sectional projection approach based
    on historical accounting data developed by prior research. '
author:
- first_name: Christopher
  full_name: Mokwa, Christopher
  last_name: Mokwa
- first_name: Sönke
  full_name: Sievers, Sönke
  last_name: Sievers
citation:
  ama: 'Mokwa C, Sievers S. Biases in Management Forecasts of Venture-Backed Start-Ups:
    Evidence from Internal Due Diligence Documents of VC Investors. <i>SSRN Electronic
    Journal</i>. 2012. doi:<a href="https://doi.org/10.2139/ssrn.1714399">10.2139/ssrn.1714399</a>'
  apa: 'Mokwa, C., &#38; Sievers, S. (2012). Biases in Management Forecasts of Venture-Backed
    Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors. <i>SSRN
    Electronic Journal</i>. <a href="https://doi.org/10.2139/ssrn.1714399">https://doi.org/10.2139/ssrn.1714399</a>'
  bibtex: '@article{Mokwa_Sievers_2012, title={Biases in Management Forecasts of Venture-Backed
    Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors}, DOI={<a
    href="https://doi.org/10.2139/ssrn.1714399">10.2139/ssrn.1714399</a>}, journal={SSRN
    Electronic Journal}, author={Mokwa, Christopher and Sievers, Sönke}, year={2012}
    }'
  chicago: 'Mokwa, Christopher, and Sönke Sievers. “Biases in Management Forecasts
    of Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of
    VC Investors.” <i>SSRN Electronic Journal</i>, 2012. <a href="https://doi.org/10.2139/ssrn.1714399">https://doi.org/10.2139/ssrn.1714399</a>.'
  ieee: 'C. Mokwa and S. Sievers, “Biases in Management Forecasts of Venture-Backed
    Start-Ups: Evidence from Internal Due Diligence Documents of VC Investors,” <i>SSRN
    Electronic Journal</i>, 2012.'
  mla: 'Mokwa, Christopher, and Sönke Sievers. “Biases in Management Forecasts of
    Venture-Backed Start-Ups: Evidence from Internal Due Diligence Documents of VC
    Investors.” <i>SSRN Electronic Journal</i>, 2012, doi:<a href="https://doi.org/10.2139/ssrn.1714399">10.2139/ssrn.1714399</a>.'
  short: C. Mokwa, S. Sievers, SSRN Electronic Journal (2012).
date_created: 2018-10-31T12:16:45Z
date_updated: 2022-01-06T07:01:43Z
department:
- _id: '275'
doi: 10.2139/ssrn.1714399
jel:
- G24
- G32
- M13
- M41
keyword:
- Management forecasts
- Forecasting biases
- Venture-backed start-ups
- Projection methods
language:
- iso: eng
publication: SSRN Electronic Journal
publication_status: published
status: public
title: 'Biases in Management Forecasts of Venture-Backed Start-Ups: Evidence from
  Internal Due Diligence Documents of VC Investors'
type: journal_article
user_id: '64756'
year: '2012'
...