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Information about this author at RePEc
NBER Working Papers and Publications
|April 2018||Cost of Experimentation and the Evolution of Venture Capital|
with Ramana Nanda, Matthew Rhodes-Kropf: w24523
We study how technological shocks to the cost of starting new businesses have led the venture capital model to adapt in fundamental ways over the prior decade. We both document and provide a framework to understand the changes in the investment strategy of venture capitalists (VCs) in recent years — an increased prevalence of a “spray and pray” investment approach — where investors provide a little funding and limited governance to an increased number of startups that they are more likely to abandon, but where initial experiments significantly inform beliefs about the future potential of the venture. This adaptation and related entry by new financial intermediaries has led to a disproportionate rise in innovations where information on future prospects is revealed quickly and cheaply, and r...
Published: Michael Ewens & Ramana Nanda & Matthew Rhodes-Kropf, 2018. "Cost of experimentation and the evolution of venture capital," Journal of Financial Economics, . citation courtesy of
|June 2013||Is a VC Partnership Greater than the Sum of its Partners?|
with Matthew Rhodes-Kropf: w19120
This paper investigates whether individual venture capitalists have repeatable investment skill and to what extent their skill is impacted by the VC firm where they work. We examine a unique dataset that tracks the performance of individual venture capitalists' investments across time and as they move between firms. We find evidence of skill and exit style differences even among venture partners investing at the same VC firm at the same time. Furthermore, our estimates suggest the partner's human capital is two to five times more important than the VC firm's organizational capital in explaining performance.
Published: Michael Ewens & Matthew Rhodes-Kropf, 2015. "Is a VC Partnership Greater Than the Sum of Its Partners?," Journal of Finance, American Finance Association, vol. 70(3), pages 1081-1113, 06. citation courtesy of