Harvard Study Says Friendship is Bad for Venture Capitalism

A post on the Wall Street Journal‘s blog today looks at a new study conducted by Harvard University for the National Bureau of Economic Research. The working study, titled “The Cost of Friendship,” found that venture capitalists are more likely to partner up if they share what the authors call “affinity characteristics” such as graduating from the same university or belonging to the same ethnic group.

And how do these old schoolmates do on their ventures? According to the Journal, worse:

“…those who co-invested based on shared abilities tended to improve their overall performance as a group, [but] the same didn’t hold true for those that partnered based on non-ability similarities such as ethnicity or gender.”

Read more from the Journal about the study here


Tags:, , , ,

Leave a Reply

Have you heard?

Missouri Business Alert is participating in CoMoGives2019!

Find out how we plan to use your gift to enhance training and programming for our students

Learn more