You said successful? Actual and perceived performance of venture capital in france

Karim Medjad, Etienne Krieger, Violetta Gerasymenko, Romain Grandsart, Frédéric Iselin

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)


Using a theoretical financial model depicting a typical venture capital fund specialized in start-up companies (seed/early stage financing), we have invited professional investors and entrepreneurs to suggest an estimated internal rate of return (IRR) to characterize three portfolio outcomes: "success", "average" and "failure". Our findings reveal a perception that is disconnected from reality, namely a strong propensity to overestimate the notion of success and to underestimate that of failure. The causes of this overoptimistic perception arguably include an element of pure risk aversion as well as a dose of fantasy, but this is probably not the whole story. In a subsequent phase, we intend to use a broader sample to determine if, and to what extent, this is a European bias that calls for a European response.

Original languageEnglish
Pages (from-to)353-366
Number of pages14
JournalInternational Journal of Business
Issue number4
Publication statusPublished - 2011


  • Behavioral finance
  • Entrepreneurship
  • Perception biases
  • Performance
  • Portfolio analysis
  • Venture capital


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