When do organisations learn from successful experiences? The case of venture capital firms

This article examines the extent to which venture capital firms (VCFs) learn from successful experience and when such experience influences the likelihood of future successful exits. To test our theory, we drew upon a novel dataset of young French VCFs and their investments. Results indicate that VCFs learn from success, but only up to a certain level of after which the benefits decline. We also found an adverse effect on future performance from the first VCF experience, if it was successful. Refuting our prediction, VCFs appear to learn better from significant, rather than small, successes. Finally, our results reveal that VCFs learn most from more recent success but that extrapolating lessons from more dated experience may harm future performance. Our study contributes to the venture capital and organisational learning literature with practical implications for venture capitalists and entrepreneurs