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Research Note: Venture Capitalists' Investment Criteria: A Replication

Author

Listed:
  • Vance H. Fried

    (Oklahoma State University)

  • Robert D. Hisrich

    (Case Western Reserve University)

  • Amy Polonchek

    (Oklahoma Dept of Vocational & Technical Education)

Abstract

This study replicates substantial portions of a study entitled “Criteria Used by Venture Capitalists to Evaluate New Ventures Proposals” by MacMillan, Siegal, and SubbaNarasimha. Results were similar to the earlier work. The differences observed can be attributed to history effects caused by the passage of six years between the studies. Venture capitalists have become more concerned over market acceptance and less demanding of high potential rates of return and quick exit. These changes represent a more realistic view of venture potential.

Suggested Citation

  • Vance H. Fried & Robert D. Hisrich & Amy Polonchek, 1993. "Research Note: Venture Capitalists' Investment Criteria: A Replication," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 3(1), pages 37-42, Fall.
    • Handle: RePEc:pep:journl:v:3:y:1993:i:1:p:37-42
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    References listed on IDEAS

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    1. Bygrave, William & Fast, Norman & Khoylian, Roubina & Vincent, Linda & William Yue, 1989. "Early rates of return of 131 venture capital funds started 1978-1984," Journal of Business Venturing, Elsevier, vol. 4(2), pages 93-105, March.
    2. Dewald, William G & Thursby, Jerry G & Anderson, Richard G, 1986. "Replication in Empirical Economics: The Journal of Money, Credit and Banking Project," American Economic Review, American Economic Association, vol. 76(4), pages 587-603, September.
    3. Macmillan, Ian C. & Siegel, Robin & Narasimha, P. N. Subba, 1985. "Criteria used by venture capitalists to evaluate new venture proposals," Journal of Business Venturing, Elsevier, vol. 1(1), pages 119-128.
    4. Ruhnka, John C. & Young, John E., 1987. "A venture capital model of the development process for new ventures," Journal of Business Venturing, Elsevier, vol. 2(2), pages 167-184.
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    Cited by:

    1. Garry Bruton & Vance Fried & Robert D. Hisrich, 1997. "Venture Capitalist and CEO Dismissal," Entrepreneurship Theory and Practice, , vol. 21(3), pages 41-54, April.

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    More about this item

    Keywords

    Venture Capital; Investment Criteria;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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