Electronic Thesis and Dissertation Repository

Thesis Format

Integrated Article


Doctor of Philosophy




Jean-Philippe Vergne


University College London

2nd Supervisor

Lee Watkiss



Market actors, such as venture founders, incumbent managers, and third parties, respectively shape categories to influence investors’ perceptions of the nascent markets and related firms. Yet we know less about the idiosyncratic role that producers and third parties play in the investment process. This dissertation seeks to advance our understanding about categorizations in shaping investment decisions.

The first essay of the dissertation distinguishes between categorical associations made by external third parties (hearafter, “external categorization”) and those made internally by organizational insiders (hearafter, “internal categorization”) and accounts for their respective effects on investment decisions. Based on a database on blockchain ventures, I show that ventures obtain more funding when external experts deem them categorically focused despite co-founders’ claims that the venture is moderately unfocused. The insight is that the effect of straddling can be negative or positive depending on who the categorizer is.

The second essay reinforces the earlier findings by meta-analyzing prior 150 publications. I illustrate the overall and unique relationships among multiple categorical associations made by external third parties (hereafter, "external straddling"), those made by organizational insiders (hearafter, “internal straddling”), and several organizational outcomes. I find that external straddling negatively drives audience appeal while internal straddling positively drives audience appeal, and that these effects are robust after considering different types of outcomes and confounding moderators. I present a more nuanced take on the role of straddling, thus raising the need for reconceptualizing the notion of category straddling.

The third essay introduces two new properties of categorization that help predict CVC investment decisions of incumbent managers: First, the categorization breadth by top managers—tendency to define peer firms beyond a firm’s existing industry boundaries—leads them to scan the periphery of the environment and increase the firm’s proclivity for CVC investment. Second, the categorization granularity by top managers—tendency to distinguish specific subcategories of peer firms rather than identify coarse groupings of peers—leads to more caution and decreases the firm’s proclivity for CVC investment. My analyses of US banks’ CVC investment in FinTech ventures provide support to the dual roles managerial categorizations play during the CVC investment process.

Summary for Lay Audience

Investors categorize firms across different dimensions, such as industry classifications, types of technologies, and types of business models, in their investment decisions. These categories help investors make sense of the investment opportunity and identify emerging niches within a particular industry. So, how do investors form these categories? They often rely on external categorization by third parties (e.g., stock analysts, market researchers, and media) to point out investment opportunities and make investment decisions. These external categories differ from the internal categories defined by the firm’s top managers or founders.

Therefore, this dissertation explores how external and internal categorization differently influence investor perception and decision-making. Findings from the first two essays in my dissertation suggest that investors differently perceive a firm’s associations with multiple categories depending on who the categorizer is. In addition, my last essay, focusing on internal categorization in depth, finds that managers categorize their investment targets in their CVC investment decisions via two different dimensions. My findings shed light on the relationship between categorization and investment decisions by providing strong implications for practitioners. For instance, entrepreneurs seeking funding should consider ways to align their pitch with different expectations from third parties and investors.

Available for download on Tuesday, July 01, 2025