Tyranny of the Personal Network: The Limits of Arm’s Length Fundraising in Venture Capital

We are grateful to Jennifer Riegel, Sarah Kenyon, Charles F. Glass, Jr., and others for guidance on institutional details. We thank Bo Li, Mike Ewens, Camille Hebert, Erik Mayer, Morten Sorensen, Ilya Strebulaev, Jiajie Xu, Steven Utke, Qianqian Du, and seminar participants at the AIEA-NBER Conference on Innovation and Entrepreneurship, SFS Cavalcade, NFA, Northeastern Finance Conference, Bretton Woods Finance Conference, CICF, the 2025 IPC Current Issues in Alternatives Symposium, the SEC, Stanford, UCLA, Boston University, HBS (EM), Cornell, Texas A&M, Florida International University, University of Illinois Chicago, Lehigh University, U Sydney, UTS, and UNSW for helpful feedback. Some of Howell and Parker’s work on this project was funded by the U.S. Securities and Exchange Commission (SEC) Office of the Advocate for Small Business Capital Formation. This paper represents the independent research and analysis of the authors and expresses the authors’ views and does not necessarily reflect those of the Commission, the Commissioners, other members of the staff, or the National Bureau of Economic Research.

• October 23, 2024
• March 31, 2025