Human Capital Theory and Venture Capital Firms: Exploring
Year: 2005
Type: preprint
Abstract: Human capital theory is used to investigate the impact of the education and experience of top management teams (TMTs) on the number of (portfolio companies that go public) and (portfolio companies that go bankrupt) experienced by those teams' venture capital firms (VCFs). Taken together, the hypotheses suggest that TMTs with industry experience in law, finance, and consulting, as well as advanced education in business, law, science, and the humanities, have more home runs and fewer strike outs in their portfolios. Data on the education and industry experience of 749 TMT members from 112 VCFs were used to test these hypotheses.Although the data do not support all of the hypotheses, they indicate that general human capital is positively associated with home runs. However, specific human capital (such as law experience or education in the humanities and science) is associated with strike outs.Clearly, particular aspects of human capital contribute to some, but not all, dimensions of performance. (SAA)
Source: SSRN Electronic Journal
Authors: Dimo Dimov, Dean A. Shepherd
Institutions: University of Bath, University of Colorado Boulder
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3004193185