Specific managerial human capital, firm age, and venture capital financing of biopharmaceutical ventures: A contingency approach

In this article we investigate how specific human capital in biopharmaceutical ventures' management teams impacts the financial commitment of venture capital investors. Further, we explore how this impact changes with the venture's age. We draw on data from 138 VC financing rounds in the US and Europe to show that biopharmaceutical ventures with greater portions of specific managerial human capital in the fields of management, law, medicine, and biosciences acquire more money in venture capital financing rounds, but this effect is contingent on the age of the venture. We discuss the implications of these findings for the literature on VC financing of high technology ventures.