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Author Gompers, Paul ♦ Kovner, Anna ♦ Lerner, Josh ♦ Scharfstein, David
Source CiteSeerX
Content type Text
File Format PDF
Subject Domain (in DDC) Computer science, information & general works ♦ Data processing & computer science
Subject Keyword Venture Capital ♦ Venture Capital Organization ♦ Different Type ♦ Individual Venture Capitalist ♦ Inefficient Allocation ♦ Organizational Structure ♦ Poor Selection ♦ Strong Positive Relationship ♦ Harvard University ♦ Experience Tend ♦ Individual Investment Professional ♦ Organizational Characteristic ♦ Marginal Effect
Abstract This paper examines how organizational structure affects behavior and performance by looking closely at the performance of different types of venture capital organizations. We find a strong positive relationship between the degree of specialization by individual venture capitalists at a firm and its success. At the same time, however, the marginal effect of increasing specialization at the firm is much weaker when the individual investment professionals are highly specialized themselves. The deterioration in performance appears due to both an inefficient allocation of funding across industries and poor selection of investments within industries. Organizational characteristics, however, are not irrelevant: venture capital organizations with more experience tend to outperform those with less experience. *Harvard University. Gompers, Lerner, and Scharfstein are also affiliates of the National
Educational Role Student ♦ Teacher
Age Range above 22 year
Educational Use Research
Education Level UG and PG ♦ Career/Technical Study
Learning Resource Type Article
Publisher Date 2006-01-01