IDEAS home Printed from
   My bibliography  Save this article

Venture Capitalists' Assessment of New Venture Survival


  • Dean A. Shepherd

    (University of Colorado, College of Business, Campus Box 419, Boulder, Colorado 80309-0419 and Lally School of Management, Rensselaer Polytechnic Institute, Troy, New York 12180-3590)


This study investigates whether VCs' assessment policies of new venture survival are consistent with those arising from the strategy literature (using two established strategy perspectives). Strategy scholars suggest the nature of the markets, competition, and decisions made by the management team affect a new venture's survival chances. The findings demonstrate that VCs' assessment policies are predominantly consistent with those proposed by strategy scholars---providing insight into why VCs consider certain criteria in their assessment of new venture survival as well as why some criteria are more important in their assessment than others. Through this increased understanding of venture capitalists' decision making, entrepreneurs seeking capital may be better able to address their requests for funding to those criteria venture capitalists find most critical to the survival of a new venture. Venture capitalists may use these findings to better understand their own decision making process, which, in turn, provides the opportunity to increase evaluation efficiency.

Suggested Citation

  • Dean A. Shepherd, 1999. "Venture Capitalists' Assessment of New Venture Survival," Management Science, INFORMS, vol. 45(5), pages 621-632, May.
  • Handle: RePEc:inm:ormnsc:v:45:y:1999:i:5:p:621-632

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Dunne, Timothy & Roberts, Mark J & Samuelson, Larry, 1989. "Firm Entry and Postentry Performance in the U.S. Chemical Industries," Journal of Law and Economics, University of Chicago Press, vol. 32(2), pages 233-271, October.
    2. Schmalensee, Richard, 1981. "Economies of Scale and Barriers to Entry," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1228-1238, December.
    3. Karakaya, Fahri & Kobu, Bulent, 1994. "New product development process: An investigation of success and failure in high-technology and non-high-technology firms," Journal of Business Venturing, Elsevier, vol. 9(1), pages 49-66, January.
    4. Macmillan, Ian C. & Zemann, Lauriann & Subbanarasimha, P. N., 1987. "Criteria distinguishing successful from unsuccessful ventures in the venture screening process," Journal of Business Venturing, Elsevier, vol. 2(2), pages 123-137.
    5. Roure, Juan B. & Keeley, Robert H., 1990. "Predictors of success in new technology based ventures," Journal of Business Venturing, Elsevier, vol. 5(4), pages 201-220, July.
    6. Zacharakis, Andrew L. & Meyer, G. Dale, 1998. "A lack of insight: do venture capitalists really understand their own decision process?," Journal of Business Venturing, Elsevier, vol. 13(1), pages 57-76, January.
    7. Schmalensee, Richard, 1982. "Product Differentiation Advantages of Pioneering Brands," American Economic Review, American Economic Association, vol. 72(3), pages 349-365, June.
    8. Hisrich, Robert D. & Jankowicz, A. D., 1990. "Intuition in venture capital decisions: An exploratory study using a new technique," Journal of Business Venturing, Elsevier, vol. 5(1), pages 49-62, January.
    9. N/A, 1991. "Appraisal," National Institute Economic Review, National Institute of Economic and Social Research, vol. 138(1), pages 3-5, November.
    10. Levy, David T, 1989. "Firm Entry and Postentry Performance in the U.S. Chemical Industries: Comment," Journal of Law and Economics, University of Chicago Press, vol. 32(2), pages 273-275, October.
    11. De Castro, Julio O. & Chrisman, James J., 1995. "Order of market entry, competitive strategy, and financial performance," Journal of Business Research, Elsevier, vol. 33(2), pages 165-177, June.
    12. Riquelme, Hernan & Rickards, Tudor, 1992. "Hybrid conjoint analysis: An estimation probe in new venture decisions," Journal of Business Venturing, Elsevier, vol. 7(6), pages 505-518, November.
    13. Roure, Juan B. & Maidique, Modesto A., 1986. "Linking prefunding factors and high-technology venture success: An exploratory study," Journal of Business Venturing, Elsevier, vol. 1(3), pages 295-306.
    Full references (including those not matched with items on IDEAS)


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:45:y:1999:i:5:p:621-632. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.