Start-up teams and venture capital exit performance in Germany: venture capital firms are not selecting on the right criteria

This paper identifies predictors of venture capital exit performance that are related to the founding teams of young ventures. As portfolio companies of venture capital firms are a very unique subgroup of young ventures, and as exit performance is a success variable that is only rarely examined, this study provides new insights from an investor's point of view. Based on data from 64 non-disclosed business plans of portfolio companies from German venture capital firms, we prove known team-related success factors for their potential to drive exit returns. We find that venture capital firms are not selecting on the right criteria.