HEC Research Papers Series,
HEC Paris

Abstract: I examine how the breadth of venture capital (VC) partners' human capital influences investment selection, startup performance, and innovation. Partners with broader human capital are more likely to lead investments in novel startups with previously unexplored business models and significantly increase their likelihood of major success; however, they underperform when leading non-novel deals. Exploiting plausibly exogenous variation in partner time constraints as a shock to the within-VC firm likelihood of leading a deal, I provide causal evidence for these effects. A theoretical model endogenizes startup creation, partner assignment, and investment to rationalize the empirical findings and provide additional testable predictions. The results highlight the nuanced value of human capital breadth in financing innovation.

Keywords: Venture capital; human capital; financing novelty; portfolio choice; performance; exploration-exploitation

JEL-codes: G11; G24; G34

144 pages, First version: August 1, 2025. Revised: December 5, 2025.

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