VC investors’ venture screening: the role of the decision maker’s education and experience

Alexandra Moritz, Walter Diegel, Joern Block*, Christian Fisch

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

7 Citations (Scopus)

Abstract

We assess whether and how VC investors’ education and experience influence their screening decisions of potential investee candidates. Empirically, we perform an experimental choice-based-conjoint (CBC) analysis with 564 individual VC investors. Our results highlight that the level and field of education, as well as the decision maker’s investment and entrepreneurial experience, moderate the relative importance of different screening criteria. More specifically, we find that international scalability seems to become more important for decision makers with higher education and those with entrepreneurial experience. Whereas decision makers with a background in natural science focus on the value-added of the product or service, engineers seem to value a break even profitability and focus less on the management team. Investment experience, on the other hand, leads to a stronger focus on the management team. Our study contributes to the literature investigating the influence of human capital characteristics of the decision maker in venture financing. Practical implications exist for entrepreneurial ventures seeking financing and for risk capital investors making investments in such ventures.

Original languageEnglish
Pages (from-to)27-63
Number of pages37
JournalJournal of Business Economics
Volume92
Issue number1
DOIs
Publication statusPublished - Jan 2022

Bibliographical note

Funding Information:
Deutsche Forschungsgemeinschaft (DFG). The title of the grant is Entscheidungskriterien von Risikokapitalgebern in der Spätphasenfinanzierung von Wachstumsunternehmen. The Grant ID is 400567894. The grant was received by Joern Block, who is the corresponding author.

Publisher Copyright:
© 2021, The Author(s).

Fingerprint

Dive into the research topics of 'VC investors’ venture screening: the role of the decision maker’s education and experience'. Together they form a unique fingerprint.

Cite this