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Human Capital Breadth and the Financing of Innovative Startups

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  • Duevski, Teodor

    (HEC Paris)

Abstract

I examine how the breadth of venture capital (VC) partners' human capital influences investment selection, startup performance, and innovation. Partners with broader human capital are more likely to lead investments in novel startups with previously unexplored business models and significantly increase their likelihood of major success; however, they underperform when leading non-novel deals. Exploiting plausibly exogenous variation in partner time constraints as a shock to the within-VC firm likelihood of leading a deal, I provide causal evidence for these effects. A theoretical model endogenizes startup creation, partner assignment, and investment to rationalize the empirical findings and provide additional testable predictions. The results highlight the nuanced value of human capital breadth in financing innovation.

Suggested Citation

  • Duevski, Teodor, 2025. "Human Capital Breadth and the Financing of Innovative Startups," HEC Research Papers Series 1605, HEC Paris, revised 05 Dec 2025.
    • Handle: RePEc:ebg:heccah:1605
    DOI: 10.2139/ssrn.5239857
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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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