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Is a VC Partnership Greater Than the Sum of Its Partners?
Author(s) -
EWENS MICHAEL,
RHODESKROPF MATTHEW
Publication year - 2015
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/jofi.12249
Subject(s) - venture capital , social venture capital , business , general partnership , investment (military) , human capital , organizational capital , work (physics) , set (abstract data type) , business administration , labour economics , limited partnership , industrial organization , finance , economics , market economy , engineering , mechanical engineering , politics , political science , computer science , law , programming language
This paper investigates whether individual venture capitalists have repeatable investment skill and the extent to which their skill is impacted by the venture capital (VC) firm where they work. We examine a unique data set that tracks the performance of individual venture capitalists' investments over 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 partners' human capital is two to five times more important than the VC firm's organizational capital in explaining performance.