Overcoming the Matthew Effect in Status Dominated Environments – a Configurational Analysis of Venture Capital Investments

Publication Type
Journal contribution (peer reviewed)
Authors
Berger, Elisabeth S.C. / Kuckertz, Andreas
Year of publication
2018
Published in
Credit and Capital Markets
Band/Volume
51/2
ISBN / ISSN / eISSN
2199-1235
DOI
10.3790/ccm.51.2.293
Page (from - to)
293–314
Abstract

Entering status dominated environments as new entrant is a difficult endeavor. Accumulated
advantages go along with the tendency of incumbents to succeed, whereas entrants
are likely to lose (Matthew effect). This study examines what combination of deal resources
accumulated by venture capital partners lead to high deal performance in order to analyze
if new entrants can nonetheless overcome the burden of being new, i. e. having a low
status position and only weak ties with current actors in status dominated environments.
Our configurational analysis of 333 venture capital investments reveals opportunities for
entrants to succeed that go beyond joining forces with established actors. Our findings
contribute to research on interorganizational network formation and the strategic actions
new entrants on the VC market may take to be successful. Furthermore, the study sheds
light on the effect of syndicated opposed to single venture capitalist deals and suggests that
successful syndicates require a certain degree of homogeneity among the investors.

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