Decoding VCs Decision Making Behavior in Biotechnology: The Relative Importance of Established Decision Criteria and the Role of Start-Ups’ Knowledge Networks

37 Pages Posted: 14 Sep 2011

See all articles by Stephan Jung

Stephan Jung

Vienna University of Economics and Business - Department of Management and Innovation

Giordano Koch

University of Hamburg

Mario G. Rauch

affiliation not provided to SSRN

Date Written: September 13, 2011

Abstract

Venture Capitalists (VCs) base their investment decision on reliable criteria to predict future performance of start-ups. However, many studies have ignored potential discrepancies in relative importance of various decision criteria that might occur when focusing on a special industry or a particular investment stage and have not considered Knowledge Networks as an independent decision criterion of VCs. Results of an adaptive conjoint-analysis show that focusing on a special industry and investment stage leads to a different relative importance ratio of the decision criteria, and Knowledge Networks was found to be an additional decision criterion.

Keywords: venture capital decision making, knowledge networks, conjoint-analysis, biotechnology

Suggested Citation

Jung, Stephan and Koch, Giordano and Rauch, Mario G., Decoding VCs Decision Making Behavior in Biotechnology: The Relative Importance of Established Decision Criteria and the Role of Start-Ups’ Knowledge Networks (September 13, 2011). Available at SSRN: https://ssrn.com/abstract=1926626 or http://dx.doi.org/10.2139/ssrn.1926626

Stephan Jung (Contact Author)

Vienna University of Economics and Business - Department of Management and Innovation ( email )

Nordbergstrasse 15
Vienna, Vienna 1090
Austria

Giordano Koch

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

Mario G. Rauch

affiliation not provided to SSRN ( email )

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