Note On Organizational Learning In Venture Capital

By Jerker Denrell, Chris Tilghman
2004 | Case No. E185
Professional success in the venture capital industry depends in part on a venture capitalist’s ability to learn about new areas of potential investment. By definition, a “venture” is a new pursuit; its specifics are unknown in the beginning. For professionals who make a living investing in these new pursuits, the ability to come up to speed quickly and accurately on a new industry, an emerging technology, or a potential market is critical. Most venture capitalists focus on one or two investment areas or themes for several years at a time, but over the course of a career, the nature of those very themes change as customer needs evolve, markets mature, and investment returns soften. To adapt, venture capitalists (VCs) must acquire new domains of expertise. This note is about how they do so and how different investment strategies determine what learning activities VCs undertake.
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