Coller Institute of Venture at Tel Aviv University 
Hung-Chia Scott Hsu is an Assistant Professor in Finance at Sam M. Walton College of Business at the University of Arkansas. His research interests include venture capital, private equity, political connections, and initial public offerings. His research has appeared in Journal of Finance and the Journal of Corporate Finance. His research was mentioned in the Blog of the Stigler Center at the Booth School of Business of University of Chicago, Harvard Law School Forum on Corporate Governance and Financial Regulation, Bloomberg Brief, New York Times, CNBC, Forbes, PBS, Time, Herald Tribune, Huffington Post, among others.
Dr. Vikram Nanda joined the Jindal School of Management at UT Dallas in 2015. He previously held academic positions at Rutgers University, Georgia Tech, Arizona State University, The University of Michigan and The University of Southern California. Nanda has broad research interests with a focus on corporate finance and financial institutions. His work seeks to explain the attributes and performance of financial institutions.
Qinghai Wang is Professor of Finance and the Richard T. Crotty Chair in the College of Business Administration at the University of Central Florida. He received his PhD from the Fisher College of Business, the Ohio State University. His research focuses on the investment decisions and portfolio choices of institutional and individual investors and the impact of their behaviors on asset prices and market efficiency. His research interests also include behavioral aspects of corporate decision making and corporate governance, shareholder voting rights and the role of investors in corporate governance. Professor Wang’s works have been published in the Journal of Finance, Journal of Financial Economics, Review of Financial Studies, and other finance journals. He has presented his research and won research awards at various academic conferences.
Work Abstract
Investment Allocation in Venture Capital Funds
Hung-Chia Hsu, Vikram Nanda, Qinghai Wang
Venture capital rms strategically allocate investments both within and across VC funds. We document that early investments in a VC fund’s portfolio are more likely to exit successfully than the later investments and the di erence in investment performance within a VC fund portfolio is partly driven by investment allocation across VC funds. Because of the incentive to raise capital for new funds, VC rms allocate high-quality projects to the subsequent funds after early investment success in the current funds. Such investment allocation strategy generates declining investment performance within a VC fund’s portfolio, contributes to VC fund performance persistence, and has important implications for both VC-investor relation and VC-entrepreneur matching.