Venture Capitalists' Evaluations of Start-up Teams: Trade-offs, Knock-out Criteria, and the Impact of VC Experience

Nikolaus Franke, Marc Gruber, Dietmar Harhoff, Joachim Henkel

    Publication: Scientific journalJournal articlepeer-review

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    The start-up team plays a key role in venture capitalists' evaluations of venture proposals. Our findings go
    beyond existing research, first by providing a detailed exploration of VCs' team evaluation criteria, and
    second by investigating the moderator variable of VC experience. Our results reveal utility trade-offs
    between team characteristics and thus provide answers to questions such as "What strength does it take to
    compensate for a weakness in characteristic A?" Moreover, our analysis reveals that novice VCs tend to
    focus on the qualifications of individual team members, while experienced VCs focus more on team
    cohesion. Data was obtained in a conjoint experiment with 51 professionals in VC firms and analyzed
    using discrete choice econometric models. (author's abstract)
    Original languageEnglish
    Pages (from-to)459-483
    JournalEntrepreneurship: Theory & Practice
    Issue number3
    Publication statusPublished - 1 May 2008

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