Do Experts Know What Growth is? Two Studies on Perception

Malin Brännback (), Alan L. Carsrud () and Niklas Kiviluoto ()
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Malin Brännback: Åbo Akademi University
Alan L. Carsrud: Åbo Akademi University
Niklas Kiviluoto: Palmu Evolution Oy

Chapter 7 in Understanding the Myth of High Growth Firms, 2014, pp 83-96 from Springer

Abstract: Abstract One of us remembers sitting in a meeting at Stanford University in 2007 with a group of managing partners of a half dozen of Silicon Valley’s leading venture capitalist (VC) firms. The topic of the discussion was how VCs went about picking winners for their portfolios. One member of the audience asked, quite naively, if working with previous firms had helped them to improve their hit rate for finding stars. The reply was that the success rates had not changed at all. The VC went on to explain, he felt this was due to the differences in technology in the firms. No one challenged that the problem could have been the demand by the VC for high-growth strategies in their portfolio firms. If so-called experts cannot get better at picking winners then this all starts to look like gambling and the deck is stacked against everyone.

Keywords: Small Firm; Venture Capitalist; Employment Growth; Public Investor; Business Plan (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-1-4614-9457-7_7

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