Abstract
The success of technology transfer depends in part on new technology-based firms (NTBFs) accessing venture capital (VC). Yet, little is known about venture capitalists' selection processes in this context. We examine the heterogeneity in the selection behaviour of VCs using a unique hand-collected dataset comprising 68 European early-stage high-tech VC investors. We follow an inductive research design and use a conjoint analysis to decompose the investment decisions of VC investors. We identify three different clusters of VC investors: those who focus on technology (technology investors), those who focus on finance (financial investors) and those who focus on human capital (people investors). Technology investors attach more importance to the appropriability of the technology and contact with the entrepreneur than the other groups of VCs. For people investors, the human factors such as leadership capacities of the entrepreneur and the quality of the team are most important. Financial investors make their investment decision based on a limited set of factors such as ROI, growth and team completeness. Our results have important implications for NTBFs, venture capitalists and universities involved in technology transfer through spin-off companies.
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