Assessing Potential Leaders of Private Equity Funded Ventures

Abstract

When the risks are high and the outcomes uncertain, how can investors in start-up enterprises increase the odds of success? Many rely heavily on their management teams to master the competitive environment and motivate workers—but how best to select the managers? Researchers in clinical psychology have developed powerful tools to assess executives' ability to function in stressful situations. By measuring the depth and consistency of an individual's coping style, psychologists can help investors and board members identify those candidates most likely to succeed in leading their ventures.