What you are is what you like –similarity biases in venture capitalists’evaluations of start-up teams

This paper extends recent research studying biases in venture capitalist’s decision-making. Wecontribute to this literature by analyzing biases arising from similarity between a venture capitalist andmembers of a venture team. We summarize the psychological foundations of such similarity effectsand derive a set of hypotheses regarding the impact of similarity on the assessment of team quality.Using data from a conjoint experiment with 51 respondents, we find that venture capitalists tend tofavor teams that are similar to themselves with regard to the type of training and professionalexperience. Our results have important implications for academics and practitioners alike....