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Is the VC Partnership Greater than the Sum of its Partners?

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  • Michael Ewens
  • Matthew Rhodes-Kropf

Abstract

Venture capital firms’ ability to repeatedly make top performing investments suggests the importance of some aspect of organizational or human capital. However, it is an unanswered question as to what extent the important attributes of performance are a part of the firm’s organizational capital or embodied in the human capital of the people inside the firm. We examine the performance at the partner-investment level to determine the extent of persistence in individual partners’ ability to IPO, achieve outsized exits or fail, and to what extent that performance is attributable to the firm or the partner. Shedding light on the sources of performance in venture capital firms will help us make progress on a fundamental question in economics as to whether a firm is more than the sum of its parts.

Suggested Citation

  • Michael Ewens & Matthew Rhodes-Kropf, "undated". "Is the VC Partnership Greater than the Sum of its Partners?," GSIA Working Papers 2012-E36, Carnegie Mellon University, Tepper School of Business.
    • Handle: RePEc:cmu:gsiawp:-1518590595
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    File URL: http://ewens.tepper.cmu.edu/papers/vc-partners.pdf
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    More about this item

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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