Insight

Strength in numbers

What attracts a venture capitalist to invest in a firm?

What makes venture capital (VC) firms pick a particular investee over another? And who or what influences such decisions? Researchers Michael Ewens and Matthew Rhodes-Kropf set out to study the skills of different partners at the same VC firm and found significant differences in their styles of functioning. In fact, the study suggests that the partners’ human capital is two to five times more important than the whole firm’s organisational capital when it comes to output.

 

Title: Is a VC partnership greater than the sum of its partners?
Source: The National Bureau of Economic Research

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