Working Paper | HBS Working Paper Series | 2013

Is a VC Partnership Greater Than the Sum of Its Partners?

by Michael Ewens and Matthew Rhodes-Kropf


This paper investigates whether individual venture capitalists have repeatable investment skill and to what extent their skill is impacted by the VC firm where they work. We examine a unique dataset that tracks the performance of individual venture capitalists' investments across time and as they move between firms. We find evidence of skill and exit style differences even among venture partners investing at the same VC firm at the same time. Furthermore, our estimates suggest the partner's human capital is two to five times more important than the VC firm's organizational capital in explaining performance.

Keywords: venture capital; Investing; Persistence; Performance Persistence; Theory of the Firm; Venture Capital; Organizations; Human Capital; Performance Evaluation;


Ewens, Michael, and Matthew Rhodes-Kropf. "Is a VC Partnership Greater Than the Sum of Its Partners?" Harvard Business School Working Paper, No. 12-097, April 2012. (Revised January 2013, June 2013. Revise and Resubmit Journal of Finance. NBER Working Paper Series, No. 19120, June 2013)