How does the social capital of venture capitalists (VCs) affect the valuation of start-ups? Based on the social capital literature, we hypothesize a positive effect of VCs’ social capital, derived from past syndication, on the amount of money they put into new ventures. Our results indicate that both structural aspects, such as the number of connections, and relational aspects, such as the diversity of network partners’ attributes, of VCs’ social networks matter. While generally exhibiting positive effects, our results highlight that the role and effect of VCs’ social capital are much more complex than previously thought.
Alexy, Oliver; Sandner, Philipp; and ter Wal, Anne
"THE SOCIAL CAPITAL OF VENTURE CAPITALISTS AND ITS IMPACT ON THEIR INVESTMENTS IN START-UP FIRMS,"
Frontiers of Entrepreneurship Research: Vol. 30
, Article 1.
Available at: http://digitalknowledge.babson.edu/fer/vol30/iss14/1