Working Paper: NBER ID: w19120
Authors: Michael Ewens; Matthew Rhodes-Kropf
Abstract: This paper investigates whether individual venture capitalists have repeatable investment skill and to what extent their skill is impacted by the VC firm where they work. We examine a unique dataset that tracks the performance of individual venture capitalists' investments across time and as they move between firms. We find evidence of skill and exit style differences even among venture partners investing at the same VC firm at the same time. Furthermore, our estimates suggest the partner's human capital is two to five times more important than the VC firm's organizational capital in explaining performance.
Keywords: venture capital; investment skill; human capital; organizational capital
JEL Codes: G24; G30; G32; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exit styles (Y60) | impact of individual characteristics on outcomes (I24) |
| partner's past IPO rate (G24) | probability of achieving an IPO on subsequent investments (G24) |
| human capital of partners (J24) | performance outcomes (L25) |
| partner fixed effects (C23) | variation in exit valuations (G19) |