Making the cut

At a time when start-ups are a growing trend, venture capitalists (VCs) are sought after more than ever. The study suggests that VCs’ market reputation is two-fold: VCs whose portfolio compositions are consistent with expectations about future risk develop an expected market reputation and those who deviate from these expectations by investing in innovative projects develop an unexpected reputation. No surprises here, VCs who diversify and innovate are the only ones to come out as winners.