Phd Seminar Series: Claudia Frosi and Pietro Morino

Selection in strategy formulation: the impact of domain salience

Speaker: Claudia Frosi (Bocconi University)

Abstract: Theories of value - commitments that entrepreneurs make under uncertainty - depend on knowledge domains. However, there is no evidence that domain salience alters strategy formulation. We argue that making a domain salient raises the cognitive focus on such domain, reshaping exploration and theory formulation. A pre-registered randomized controlled trial across 3 countries experimentally manipulates the salience of the sustainability domain among early-stage entrepreneurs, measuring changes in theories of value and performance. Preliminary evidence from a pilot study shows that treated entrepreneurs incorporate more sustainability and social attributes in their theories, highlighting a possible spillover with broader educational and societal implications.

Using Machine Learning to Estimate the Effect of General Partners on Venture Capital Performance

Speaker: Pietro Morino (Bocconi University)

Abstract: Despite extensive research on performance persistence in the venture capital (VC) industry, evidence supporting the common assumption that general partners drive such persistence remains limited. In this paper, we employ machine learning methods to quantify the effect (if any) of general partners on performance persistence across multiple VC funds. Analyzing 29,021 quarterly observations from 722 funds managed by 811 general partners between 1997 and 2022, we document statistically significant, albeit modest effects of general partners on performance persistence. These magnitudes are substantially smaller than those found in the literature, highlighting the limited external validity of traditional methods. We also find that general partner effects consistently exceed VC firm effects, suggesting that individual-level analyses provide greater insights than firm-level ones. Broadly, our results suggest that most of the variation in VC performance is not attributable to the organizational characteristics of VC firms and can be explained only partially by the individuals managing them.