We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Hot Markets, Sociocognitive Cues, and New Market Entry in the U.S. Venture Capital Industry.
- Authors
Lo, Jade Y.; Xu, Lei; Park, Haemin Dennis
- Abstract
Investing in sectors that a firm has never invested in before is fundamentally a form of entrepreneurial experimentation and an integral part of wealth creation. We consider how the broader market conditions and sociocognitive cues jointly affect venture capital (VC) firms' investment decisions in new industries that are unrelated to their past experience. Although VCs are more likely to enter an unrelated new industry when the overall market is hot, they also take sociocognitive cues from their own social contacts and news media. Using the population of U.S. VC investments between 1990 and 2016, we find support for our predictions.
- Subjects
VENTURE capital; MARKET entry; SOCIAL contact; SOCIAL interaction
- Publication
Entrepreneurship: Theory & Practice, 2024, Vol 48, Issue 2, p478
- ISSN
1042-2587
- Publication type
Article
- DOI
10.1177/10422587231173687