Journal
JOURNAL OF MANAGEMENT STUDIES
Volume 48, Issue 7, Pages 1533-1561Publisher
WILEY
DOI: 10.1111/j.1467-6486.2010.00992.x
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Investigating the factors that influence venture capital decision-making has a long tradition in the management and entrepreneurship literatures. However, few studies have considered the factors that might bias an investment decision in a way that is idiosyncratic to a given investor-entrepreneur dyad. We do so in this study. Specifically, we build from the literature on the 'similarity effect' to investigate the extent to which decision-making process similarity (shared between the investor and the entrepreneur) might bias or otherwise impact the investor's evaluation of a new venture investment opportunity. Our findings suggest venture capitalists evaluate more favourably opportunities represented by entrepreneurs who 'think' in ways similar to their own. Moreover, in the presence of decision-making process similarity, the impacts of other factors that inform the investment decision actually change in counter-intuitive ways.
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