Journal Article

Learning patterns in venture capital investing in new industries

Dimo Dimov, Pablo Martin de Holan and Hana Milanov

in Industrial and Corporate Change

Volume 21, issue 6, pages 1389-1426
Published in print December 2012 | ISSN: 0960-6491
Published online April 2012 | e-ISSN: 1464-3650 | DOI: https://dx.doi.org/10.1093/icc/dts010
Learning patterns in venture capital investing in new industries

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  • Information, Knowledge, and Uncertainy
  • Entrepreneurship
  • Investment Banking
  • Business and Management
  • Technological Change; Research and Development

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Using an organizational learning perspective, we link the decision by venture capital (VC) firms to invest early in a new high-technology industry to three experiential learning mechanisms: the familiarity associated with accumulation of early funding decisions, the shaping or imprinting effect of the firm’s very first such decision, and the decay or “forgetting” associated with the dormancy of prior such decisions. We find support for these learning patterns using data on the investments made by US VC firms between 1962 and 2004.

Keywords: D83; G24; L26; M13; O31

Journal Article.  14817 words.  Illustrated.

Subjects: Information, Knowledge, and Uncertainy ; Entrepreneurship ; Investment Banking ; Business and Management ; Technological Change; Research and Development

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