Hybrid conjoint analysis: An estimation probe in new venture decisions

Riquelme, Hernán; Rickards, Tudor

doi:10.1016/0883-9026(92)90022-j

Cited by 136 publications

(90 citation statements)

References 18 publications

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“…Given these common practices by venture capitalists, suppose entrepreneurs indeed learn from previous experiences (Ucbasaran et al, 2003), they will likely raise more VC. This is because their acquired skills will make their start-ups perform better and thus attract more VC investment (MacMillan et al, 1985;Riquelme and Rickards, 1992). However, the staged VC investment process implies that acquired skills tend to attract more VC in later stages, when investors have had enough time to observe the experienced entrepreneur's performance.…”

Section: Venture Capitalists' Investment Decision Processmentioning

confidence: 98%

The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs

Zhang

2009

Small Bus Econ

140

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. Existing literature suggests that entrepreneurs with prior firm-founding experience have more skills and social connections than novice entrepreneurs. Such skills and social connections could give experienced founders some advantage in the process of raising venture capital. This paper uses a large database of venture-backed companies and their founders to examine experienced founders' access to venture capital. Compared to novice entrepreneurs, entrepreneurs with venture-backed founding experience tend to raise more venture capital at an early round of financing and tend to complete the early round much more quickly. In contrast, experienced founders whose earlier firms were not venture-backed do not show a similar advantage over novice entrepreneurs, suggesting the importance of connections with venture capitalists in the early stage of venture capital financing. However, when the analysis also takes into account later rounds of financing, all entrepreneurs with prior founding experience appear to raise more venture capital. This implies that skills acquired from any previous founding experience can make an entrepreneur perform better and in turn attract more venture capital.JEL Classification: M13, G24

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Section: Venture Capitalists' Investment Decision Processmentioning

confidence: 98%

The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs

Zhang

2009

Small Bus Econ

140

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“…The research that specifi cally looks at VC evaluation supports the idea that prior related experience is positively evaluated. These forms of experience range from strategic and/or management experience (Hisrich and Jankowicz, 1990;Riquelme and Rickards, 1992;Zacharakis and Meyer, 2000) to industry experience (Hisrich and Jankowicz, 1990;Riquelme and Rickards, 1992;Zacharakis and Meyer, 2000), and specifi c startup experience (Hall and Hofer, 1993;Hisrich and Jankowicz, 1990;Zacharakis and Meyer, 2000). In general, prior start-up experience is an important indicator of success of the current venture in terms of survival (e.g., Batjargal, 2007), performance (e.g., Chandler, 1996) and VC funding and valuations (Hsu, 2007 We discussed the average aggregate effect of how VCs evaluate founders' human capital.…”

Section: The Decision Criteria Of Venture Capitalistsmentioning

confidence: 99%

Values and judgment under uncertainty: evidence from venture capitalist assessments of founders

Matusik

George

Heeley

2008

Strategic Entrepreneurship

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We examine how judgments in the context of uncertainty vary, depending on the values of those making these judgments. We test these ideas in the context of venture capitalists' (VCs') evaluations of founders. Drawing on theoretical and empirical research on the role of values in judgment and decision making and on Schwartz's (1992Schwartz's ( , 1996 conceptualization of the basic motivational dimensions underlying human values, we hypothesize and fi nd that decision makers' process values (i.e., values governing the types of means to an end that an individual values) infl uence the perceived worth of founders' human capital. We discuss implications of these fi ndings for judgment and decision-making research, as well as practical implications for entrepreneurs and venture capitalists.

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“…And third, as VCs are Please send correspondence to: Joachim Henkel, tel. : +49-89-289-25741; fax: +49-89-289-25742; e-mail: henkel@wi.tum.de considered experts in identifying promising new ventures, their evaluation criteria are often interpreted as success factors for emerging firms (Riquelme & Rickards, 1992;Shepherd & Zacharakis, 2002).…”

Section: Introductionmentioning

confidence: 99%

Venture Capitalists’ Evaluations of Start–Up Teams: Trade–Offs, Knock–Out Criteria, and the Impact of VC Experience

Franke

Gruber

Harhoff

et al. 2008

Entrepreneurship Theory and Practice

273

226

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The start-up team plays a key role in venture capitalists' evaluations of venture proposals. Our findings go beyond existing research, first by providing a detailed exploration of VCs' team evaluation criteria, and second by investigating the moderator variable of VC experience. Our results reveal utility trade-offs between team characteristics and thus provide answers to questions such as "What strength does it take to compensate for a weakness in characteristic A?" Moreover, our analysis reveals that novice VCs tend to focus on the qualifications of individual team members, while experienced VCs focus more on team cohesion. Data were obtained in a conjoint experiment with 51 professionals in VC firms and analyzed using discrete choice econometric models.

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Hybrid conjoint analysis: An estimation probe in new venture decisions

Cited by 136 publications

References 18 publications

The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs

The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs

Values and judgment under uncertainty: evidence from venture capitalist assessments of founders

Venture Capitalists’ Evaluations of Start–Up Teams: Trade–Offs, Knock–Out Criteria, and the Impact of VC Experience

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