Ethnic Matching in the U . S . Venture Capital Market

  title={Ethnic Matching in the U . S . Venture Capital Market},
  author={Ola Bengtsson and David H. Hsu},
We document the relationship between entrepreneurial founder and venture capital partner co-ethnicity in shaping investment matches. A shared ethnicity increases the likelihood that a VC firm invests in a company, strengthens the degree of the VC firm’s involvement, increases the size and scope of the investment, and makes the financial contract more entrepreneur-friendly. These findings are robust to specifications with VC firm or company fixed effects, and the results on investment extent… CONTINUE READING