Beyond the Numbers: How Retail Investors Make Sense of Financial Disclosure in Startup Ecosystems

Abstract

Background. Financial transparency plays a central role in investment decision-making, particularly within the dynamic and uncertain environment of startup ecosystems. While previous studies have examined transparency from technical and regulatory perspectives, little is known about how retail investors subjectively interpret financial disclosures in early-stage digital ventures.

Purpose. This study addresses this gap by asking: how do retail investors experience and construct meaning from financial transparency in startup reporting?

Methodology. Using an interpretative phenomenological approach, the study explores the lived experiences of ten retail investors in Southeast Asia who engage with financial disclosures through digital investment platforms. In-depth interviews were conducted and analyzed thematically to uncover how trust, narrative authenticity, and emotional intuition shape investors’ interpretations of transparency.

Results. The findings reveal that retail investors perceive transparency not merely as accurate reporting but as a relational experience grounded in perceived honesty, accessibility of language, and alignment with personal values. Participants reported intuitive judgments about report tone and clarity, often relying more on emotional resonance than on technical data.

Conclusion. The study demonstrates that financial transparency is experienced as a communicative phenomenon rather than a static disclosure event. These insights expand our understanding of investor behavior and suggest that future financial reporting models should consider subjective meaning-making processes alongside formal accounting standards. The results offer important implications for ethical financial communication and pave the way for broader qualitative inquiry in financial behavior research.