Skill versus luck


21 November 2006

When it comes to being an entrepreneur or venture capitalist, is it better to be lucky or good? According to a new working paper, Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence from Serial Entrepreneurs, skill carries the day most of the time.

We show that entrepreneurs with a track record of success are more likely to succeed than first-time entrepreneurs and those who have previously failed, the authors observe. Similarly, more experienced venture capitalists are able to identify and invest in first-time entrepreneurs who are more likely to become serial entrepreneurs.