A Study of the Relationships among Human and Social Capital of Korean Venture Capitalists, Their Investment Strategies, and Performance

Abstract

The purpose of this study is to investigate how the human and social capitals of Korea venture capitalists influence their investment strategy and performance, considering the mediating role of the investment strategy they use. The database in which Korea Venture Investment Corp. recorded the investment or return that took place in the venture investment fund in which they invested was used. The analysis methods employed include descriptive statistics, correlation analysis, and hierarchical regression analysis with the use of the SPSS statistics package. It was found that venture capitalists with an output function background or with more experience in venture investment pursue the strategy of investing in earlier stage ventures or in more specialized industries. It was also found that the strategy of investing in earlier stage ventures mediates the relationship between output function background or more investment experience that venture capitalist has and their investment performance. For contributions and implications, first, this study pioneered the field of venture capitalist research as the first study to study the relation between investment behavior and investment performance at the individual level of venture capitalist list. Second, if venture capitalists are employed in venture capital, practical implications can be provided through the results of this study.