A Globalizing Industry
Edited by Hans Landström and Colin Mason
Recent decades have been characterized by a wave of technological changes with profound social and economic impacts. Among the many contributors to the rapid increase in the extent and nature of technological innovations, we note the emergence and availability of venture capital to fund new ideas (Florida and Kenney, 1988; Hsu and Kenney, 2005; Kortum and Lerner, 2000). Venture capital allows entrepreneurs to explore the merits of various technologies, beyond the sometimes rigid confines of large corporations (Florida and Kenney, 1988), which means uncertain but interesting ideas can be tested in practice. The venture capital model, in which risky ideas receive funds in exchange for company ownership, has been immensely successful (Gompers and Lerner, 2001), and thus the venture capital (VC) industry has expanded not only in scale but also across borders, making VC a critical research topic. Early academic writing and practical discourse on VC has largely treated it as a homogeneous concept, with a focus on what venture capitalists typically do (Sahlman, 1990). Yet the proliferation of VC firms and the apparently wide disparity in their performance has prompted a new focus on understanding the factors that can explain such differences. Venture capital in these studies entails a human side, such as the role of partners’ human capital in investment processes and outcomes. Research has shown that variations in human capital can explain differences in both the types of investments VC firms make (for example Dimov et al., 2007) and the performance of those investments (for example Dimov and Shepherd, 2005). Research in this area is thus both important and vibrant.
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