Vcs' Decision Processes : Evidence Suggesting More Experience May Not Always Be Better

Past research findings in the area of judgment and decision making suggest that increasing experience can lead to both good and bad decision making. This relationship between varying experience of venture capitalists and their decision making strategies was tested using a conjoint analytical framework. Data from 66 venture capitalists representing 47 venture capital firms in Australia was analyzed using regression analysis methods. Results from the analysis suggest a curvilinear relationship between experience and reliability in decision making, where an initial increase in experience is associated with increased reliability and further increase in this variable was generally associated with decreased reliability. Directions for further research are then proposed. (VRS)