Journal
STRATEGIC MANAGEMENT JOURNAL
Volume 30, Issue 5, Pages 487-515Publisher
WILEY-BLACKWELL
DOI: 10.1002/smj.751
Keywords
business plans; venture capital; entrepreneurship; rare-events logit; prototype theory; fast decision making
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We explore a well-known instance of fast decision making under high uncertainty, venture capital (VC) opportunity, screening. We analyze a sample of 722 funding requests submitted to all American VC firm and evaluate the influence of the form of the submission and content of business planning documents on VC funding decisions. We improve on prior literature by a) using a large sample of known representativeness, b) relating request characteristics to actual VC decisions, and c) developing an inferential logic that takes account of the multiple sources of information to which VCs have access. We find that the presence of planning documents and some information contained therein are weakly associated with VC funding decisions. Based on our inferential strategy, we,find that this information is learned independently of its inclusion in the business planning documents. Copyright (C) 2009 John Wiley & Sons, Ltd.
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