Nearly 7% of venture capitalists (VCs) were previously founders.
This paper, using the VentureSource database, asks if this group is any good at investing?
Successful founder-VCs have investment success rates that are 6.5% higher than professional VCs.
If you are an unsuccessful founder-VC your investment success is actually 4% lower than professionals.
The reason isn’t down to deal quality but value add – “Using an instrumental variables approach to separate unobservable deal quality from value-add, we find that the outperformance of successful founder VCs is consistent with them adding more value post investment.“
