Nikolaus Franke (Vienna University of Economics and BA)
Marc Gruber, Dietmar Harhoff, Joachim Henkel, Karin Hoisl (University of Munich, Germany)

Vienna University of Economics and BA and
University of Munich, Germany

In the past three decades venture capital (VC) has evolved into a distinct industry within the financial services sector of Western economies. As a major source of financing for new firms, particularly in high-tech industries, VC firms not only assume the role of risk financiers within the sector, but also serve as catalysts for innovation and renewal in the broader economy. The success of VC firms is largely determined by their ability to predict new firm performance during a multi-staged evaluation process of investment proposals. Their special expertise in weeding out bad investment proposals from good ones is documented by research findings showing that VC-backed businesses achieve higher survival rates than non-VC-backed firms. The focus of this study is the evaluation of a particularly important aspect of a start-up: the team composition.