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  • April 2010
  • Article
  • Journal of Financial Economics

Performance Persistence in Entrepreneurship and Venture Capital

By: Paul A. Gompers, Josh Lerner, David Scharfstein and Anna Kovner
  • Format:Print
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Abstract

This paper presents evidence of performance persistence in entrepreneurship. We show that entrepreneurs with a track record of success are much more likely to succeed than first-time entrepreneurs and those who have previously failed. In particular, they exhibit persistence in selecting the right industry and time to start new ventures. Entrepreneurs with demonstrated market-timing skill are also more likely to outperform industry peers in their subsequent ventures. This is consistent with the view that if suppliers and customers perceive the entrepreneur to have market-timing skill, and is therefore more likely to succeed, they will be more willing to commit resources to the firm. In this way, success breeds success and strengthens performance persistence.

Keywords

Performance; Entrepreneurship; Venture Capital; Private Equity; Market Timing; Competency and Skills; Success; Business Startups

Citation

Gompers, Paul A., Josh Lerner, David Scharfstein, and Anna Kovner. "Performance Persistence in Entrepreneurship and Venture Capital." Journal of Financial Economics 96, no. 1 (April 2010): 18–32.
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About The Authors

Paul A. Gompers

Finance
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Josh Lerner

Entrepreneurial Management
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David S. Scharfstein

Finance
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More from the Authors
  • Melio: Modernizing Payments for Small Business By: David S. Scharfstein, Dean Xu and Danielle Golan
  • Shanghai Pudong Science and Technology Investment Co., Ltd.: December 2014 By: Josh Lerner
  • Transferable Skills? Founders as Venture Capitalists By: Paul A. Gompers and Vladimir Mukharlyamov
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