Venture capital as human resource management

Venture capitalists actively participate in attracting, identifying, and suggesting managers for their portfolio companies through internal and external human resource networks. We collect and analyze survey data on the operation of this network. Theoretical and empirical analyses show that cross-sectional differences among portfolio companies should be, and are, associated with differences in the intensity with which venture capitalists network. Relevant factors include (1) the value of the information transmitted, (2) the riskiness of the activities of the portfolio companies, (3) the size of the venture capital fund, (4) the degree of difficulty in attracting executives, and (5) the reputation of the venture capitalist for successfully recycling managers.