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“Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence From Serial Entrepreneurs” – A paper at SSRN

Posted by suntzu on October 18, 2006

Authors have done extensive study and produced following stats.

  • Entrepreneurs who succeeded in a prior venture have a 30% chance of succeeding in their next venture. First-time entrepreneurs only have an 18% chance of succeeding and those have previously failed have a 20% chance of succeeding.
  • Entrepreneurs are much more likely to receive first-round funding at an early stage (60% of the time) if this is their second or subsequent venture than first time entrepreneurs (45% of the time).
  • Failed serial entrepreneurs are more likely than successful serial entrepreneurs to get funding from the same venture capital firm that financed their first ventures.
  • First-Timers or failed(s) benefit more from VC expertise and having experienced VCs certainly helps.
  • Serial Entrepreneurs end up extracting better terms from VCs.

A good paper. Read it your way back home.

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