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How Early Stage Entrepreneurs Evaluate Venture Capitalists

19 Pages Posted: 15 Dec 1999  

D. Gordon Smith

Brigham Young University - J. Reuben Clark Law School

Abstract

This paper is the first attempt to study the process and criteria used by entrepreneurs in evaluating venture capitalists. Selection process involves issues such as the time invested in gathering information, the sources of information, and the number of venture capitalists considered. Selection criteria are split into four groups: (1) Valuation; (2) Value-Added Services; (3) Reputational Factors; and (4) Venture Capitalist Attributes. The paper presents results for all respondents and compares results when the respondents are sorted by geographic region, industry, experience, and age. The paper also examines satisfaction, sorting respondents by geographic region, industry, experience, age, time devoted to the search, and criteria ranking.

JEL Classification: G24

Suggested Citation

Smith, D. Gordon, How Early Stage Entrepreneurs Evaluate Venture Capitalists. Available at SSRN: https://ssrn.com/abstract=183981 or http://dx.doi.org/10.2139/ssrn.183981

D. Gordon Smith (Contact Author)

Brigham Young University - J. Reuben Clark Law School ( email )

422 JRCB
Provo, UT 84602
United States
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