Selection Behavior of Early Stage High Technology Investors: A Pan-European Study

14 Pages Posted: 28 Feb 2011

See all articles by Bart Clarysse

Bart Clarysse

ETH Zürich

Mirjam Knockaert

Vlerick Business School

Andy Lockett

Nottingham University Business School (NUBS)

Date Written: 2006


This study looks at the investment behavior of 68 early stage venture capital funds in Europe. Using a conjoint analysis model, it lets venture capitalists make investment decisions in 27 well selected business proposals. The technique combines the advantage of post hoc studies (well coded and easy to analyze data) with those of the real time studies (identify implicit decision criteria). It finds three types of investors: people investors, financial investors and technology investors. People investors correspond most to the ones found in post hoc studies. Accordingly, they are usually investment managers with the most experience. Financial investors tend to have the least experience and make their investment decisions to a large extent based upon the financial expectations. Technology investors do take criteria such as the degree to which the technology can be protected and the degree to which they get along with the founding team into account. Product market characteristics are less important compared to other studies. This might be explained by the early stage focus. Further, the study tries to explain differences in investment behavior by the sectoral focus, the sources of the funds and the background/education of the investment manager. Technology investors make most use of public money and invest in biotech. The investment managers sometimes have an academic background. Financial investors make the least use of public capital, invest in ICT and their investment managers are the least experienced. People investors are most often found in the other sectors and the investment managers combine experience within other VC funds and have a business education.

Keywords: Entrepreneurship

JEL Classification: M13

Suggested Citation

Clarysse, Bart and Knockaert, Mirjam and Lockett, Andy, Selection Behavior of Early Stage High Technology Investors: A Pan-European Study (2006). Babson College, Babson Kauffman Entrepreneurship Research Conference (BKERC), 2002-2006, Available at SSRN:

Bart Clarysse (Contact Author)

ETH Zürich ( email )

Zürichbergstrasse 18
8092 Zurich, CH-1015

Mirjam Knockaert

Vlerick Business School ( email )

Gent, BE-9000

Andy Lockett

Nottingham University Business School (NUBS) ( email )

Jubilee Campus
Wollaton Road
Nottingham, NG8 1BB
United Kingdom

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