Venture Capitalists' Assessment of New Venture Survival

Dean A. Shepherd
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Dean A. Shepherd: University of Colorado, College of Business, Campus Box 419, Boulder, Colorado 80309-0419 and Lally School of Management, Rensselaer Polytechnic Institute, Troy, New York 12180-3590

Management Science, 1999, vol. 45, issue 5, 621-632

Abstract: This study investigates whether VCs' assessment policies of new venture survival are consistent with those arising from the strategy literature (using two established strategy perspectives). Strategy scholars suggest the nature of the markets, competition, and decisions made by the management team affect a new venture's survival chances. The findings demonstrate that VCs' assessment policies are predominantly consistent with those proposed by strategy scholars---providing insight into why VCs consider certain criteria in their assessment of new venture survival as well as why some criteria are more important in their assessment than others. Through this increased understanding of venture capitalists' decision making, entrepreneurs seeking capital may be better able to address their requests for funding to those criteria venture capitalists find most critical to the survival of a new venture. Venture capitalists may use these findings to better understand their own decision making process, which, in turn, provides the opportunity to increase evaluation efficiency.

Keywords: venture capital; decision models; new venture strategy; survival; conjoint analysis (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (115)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:45:y:1999:i:5:p:621-632

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