Vcs' Decision Processes: Evidence Suggesting More Experience May Not Always Be Better

Posted: 1 Dec 2009

See all articles by Andrew Zacharakis

Andrew Zacharakis

Babson College - Arthur M. Blank Center for Entrepreneurship

Robert A. Baron

Oklahoma State University - Tulsa

Dean Shepherd

University of Colorado at Boulder - Department of Management

Date Written: 2003

Abstract

Past research findings in the area of judgment and decision making suggest that increasing experience can lead to both good and bad decision making. This relationship between varying experience of venture capitalists and their decision making strategies was tested using a conjoint analytical framework. Data from 66 venture capitalists representing 47 venture capital firms in Australia was analyzed using regression analysis methods. Results from the analysis suggest a curvilinear relationship between experience and reliability in decision making, where an initial increase in experience is associated with increased reliability and further increase in this variable was generally associated with decreased reliability. Directions for further research are then proposed. (VRS)

Keywords: Expertise, Management decisions, Venture capitalists, Venture capital, Work experience, Bootstrap financing

Suggested Citation

Zacharakis, Andrew and Baron, Robert A. and Shepherd, Dean, Vcs' Decision Processes: Evidence Suggesting More Experience May Not Always Be Better (2003). Journal of Business Venturing, Vol. 18, p. 381-401 2003. Available at SSRN: https://ssrn.com/abstract=1513122

Andrew Zacharakis (Contact Author)

Babson College - Arthur M. Blank Center for Entrepreneurship ( email )

Babson Park, MA 02457-0310
United States

Robert A. Baron

Oklahoma State University - Tulsa

700 North Greenwood
Tulsa, OK 74106
United States

Dean Shepherd

University of Colorado at Boulder - Department of Management ( email )

Boulder, CO 80309-0419
United States
303-492-5962 (Fax)

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