Imperial College London
Portrait Picture

Professor Ramana Nanda

Business School

Associate Dean Enterprise.Professor Entrepreneurial Finance
 
 
 
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Contact

 

+44 (0)20 7594 7394ramana.nanda CV

 
 
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Location

 

1.06A53 Prince's GateSouth Kensington Campus

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Summary

 

Publications

Citation

BibTex format

@article{Ewens:2018:10.1016/j.jfineco.2018.03.001,
author = {Ewens, M and Nanda, R and Rhodes-Kropf, M},
doi = {10.1016/j.jfineco.2018.03.001},
journal = {Journal of Financial Economics},
pages = {422--442},
title = {Cost of experimentation and the evolution of venture capital},
url = {http://dx.doi.org/10.1016/j.jfineco.2018.03.001},
volume = {128},
year = {2018}
}
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RIS format (EndNote, RefMan)

TY  - JOUR
AB  - We study how technological shocks to the cost of starting new businesses have led the venture capital model to adapt in fundamental ways over the prior decade. We both document and provide a framework to understand the changes in the investment strategy of venture capitalists (VCs) in recent years – an increased prevalence of a “spray and pray” investment approach – where investors provide a little funding and limited governance to an increased number of startups that they are more likely to abandon, but where initial experiments significantly inform beliefs about the future potential of the venture. This adaptation and related entry by new financial intermediaries has led to a disproportionate rise in innovations where information on future prospects is revealed quickly and cheaply, and reduced the relative share of innovation in complex technologies where initial experiments cost more and reveal less.
AU  - Ewens,M
AU  - Nanda,R
AU  - Rhodes-Kropf,M
DO  - 10.1016/j.jfineco.2018.03.001
EP  - 442
PY  - 2018///
SN  - 0304-405X
SP  - 422
TI  - Cost of experimentation and the evolution of venture capital
T2  - Journal of Financial Economics
UR  - http://dx.doi.org/10.1016/j.jfineco.2018.03.001
UR  - http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000433526100002&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=1ba7043ffcc86c417c072aa74d649202
UR  - http://hdl.handle.net/10044/1/75630
VL  - 128
ER  -
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