Abstract

Research from the US venture capital (VC) market evidences that better performing VC firms raise larger funds (Kaplan and Schoar, 2005). Furthermore, VC partners’ human capital characteristics which predict successful exits where found to also have a positive impact on the fund raising activity (Zarutskie, 2010). The French VC industry represents a particular environment with persistent negative returns and an increasing share of funding coming from the government and tax subsidized vehicles since the financial crisis. Apart from considering past experience and education of VC partners as accumulated human capital (Dimov and Shepherd, 2005), we can look upon them as a set of social networks developed in their previous organizations (Pennings, 1998). Although some types of social networks can be beneficial for VC fund performance (Hochberg et al., 2007), research has shown that they can also lead to major inefficiencies (Kuhnen, 2009). In a VC market which is not driven by performance, these ties can have a major role in fundraising activity.

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