ABSTRACT
The purpose of this chapter is to illustrate how leveraging tools, findings, and research from the science of hiring (i.e., personnel selection science) can provide investors with the information needed to make wiser, more data driven decisions (Smart, 1999). As Tinkler et al. (2015, p. 1) argue, “like hiring, venture capitalists’ decisions operate in an evaluative context that necessitates a decision where limited information about candidates exists.” However, to the authors’ knowledge, the science of personnel selection research has yet to be systematically applied to investment decision making in the VC industry. This is surprising, given the similarities between the two. Organizations seek to select people that will drive performance. VC firms seek to select founders or founding teams that will drive startup performance. As such, this chapter explains the process by which scientists and practitioners can leverage insights from psychometrics assessment tools to improve success rates of venture capital decisions.
