PT  - JOURNAL ARTICLE
AU  - Dmitry Khanin
AU  - J. Robert Baum
AU  - Ofir Turel
AU  - Raj V Mahto
TI  - Are Some Venture Capitalists More Likely Than Others to Replace Founder-CEOs?
AID  - 10.3905/JPE.2009.12.2.019
DP  - 2009 Feb 28
TA  - The Journal of Private Equity
PG  - 19--29
VI  - 12
IP  - 2
4099  - https://pm-research.com/content/12/2/19.short
4100  - https://pm-research.com/content/12/2/19.full
AB  - Studies of VCs' investment criteria describe the quality of management team as key determinant of venture financing. We contend, however, that some VCs may be willing to fund ventures headed by poor administrators with the expectation to replace them in the future. We conjecture that VCs with higher risk tolerance, greater involvement in venture governance, and proclivity for trust-based collaboration with coinvestors will be prone to take on financing of robust ventures headed by weak leaders. A survey and interviews with 50 U.S. VCs supported these hypotheses.TOPICS: Private equity, manager selection, quantitative methods, analysis of individual factors/risk premia