Uncovering Knowledge Structures of Venture Capital Investment Decision Making

Pankaj Patel and Rodney D’Souza

The Office of Advocacy Small Business Working Papers from U.S. Small Business Administration, Office of Advocacy

Abstract: Studies on venture capital (VC) investment decision using espoused criteria and utility aggregation methods have shown mixed results. Using a latent decision structures approach from psychological scaling literature, we reduce random and systematic biases arising from VC decision environment. In addition, we further address such biases using a combination of parametric and nonparametric techniques and practitioner specified decision criteria on 143 funded and nonfunded business plans. Compared to previous studies that have emphasized the central role of the venture team in obtaining funding, we find that (a) a good venture team is critical for not rejecting a business plan but is less critical for funding a business plan (b) a good venture team has decreasing returns even for funded ventures, but favorable competitive conditions and market potential have increasing returns.

Pages: 32 pages
Date: 2008
New Economics Papers: this item is included in nep-ent and nep-knm
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sba.gov/advo/research/rs315tot.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.sba.gov/advo/research/rs315tot.pdf [301 Moved Permanently]--> https://www.sba.gov/advo/research/rs315tot.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sba:wpaper:08pprd

Access Statistics for this paper

More papers in The Office of Advocacy Small Business Working Papers from U.S. Small Business Administration, Office of Advocacy Contact information at EDIRC.
Bibliographic data for series maintained by Victoria Williams () and Rob Kleinsteuber ( this e-mail address is bad, please contact ).