How to Invest in the Next Unicorn: Venture Capital Investment Selection in Silicon Valley, Japan, and Southeast Asia

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This Stanford master’s thesis research examines investment selection decision-making at venture capital (VC) firms. In addition, it compares and contrasts similarities and differences between firms and across geographic regions. As part of this research, I conducted in-depth qualitative interviews with venture capitalists (VCs) at 32 venture capital firms in Silicon Valley, Japan, and Southeast Asia. I asked interviewees a range of questions about the investment selection decision-making practices and methods at their firms. I also asked each of them a series of questions about one initial investment that their firm had made in the past few years in which they were directly involved and which they consider to be representative of their approach. In addition, I asked them each about distinctive aspects of the venture capital industry in their respective country or region. Although the sample size was too small for formal quantitative analysis, this thesis research revealed a number of distinct patterns in the decision-making practices and methods of professional venture capital investors. The patterns confirm some of the findings of Gompers et al. 2020, e.g. regarding investment sourcing, but were notably different regarding the most attractive aspects of investments. This may be because this thesis research – unlike Gompers et al. 2020 – allowed for open-ended responses, rather than pre-set survey questions. Major issues examined in this research include: (a) investment committee voting policies and practices of VC firms; (b) the frequency with which VCs use an investment selection scoring matrix or other formal evaluation system; (c) methods used in sourcing investments; (d) the frequency with which specific portfolio companies had revenue at the time of the series A round; (e) investor perceptions of IPO versus acquisition as the likely path to exit at the time of initial investment; (f) the frequency with which VCs use opinions from outside experts in evaluating potential investments; (g) competition among VCs for deals, as measured by the presence of competing term sheets; (h) factors reported by VCs as the most important attractive aspects of specific investments; (i) factors viewed by VCs as the most important aspects of evaluating the strength of the team for specific investments; (j) issues identified by VCs as the most concerning potential weaknesses of particular investments; (k) the most important factors, as reported by VCs, when considering whether or not to make follow-on investments in specific portfolio companies; (l) and distinctive aspects of the VC industry in Silicon Valley, Japan, and Southeast Asia, as described by VCs in those regions. This thesis research may be useful for academic researchers planning to conduct further research on VC investment selection decision-making, including survey-based research such as that conducted by Gompers et al. (2020). It may also be useful for practicing VCs who are interested in studying the current investment selection practices and methods of other VCs at successful VC firms across multiple regions.


Type of resource text
Date created May 31, 2022
Date modified December 5, 2022
Publication date June 2, 2022; May 31, 2022


Author Earnheart-Gold, Sasha
Thesis advisor Dasher, Richard
Degree granting institution Stanford University, Stanford Global Studies, Center for East Asian Studies


Subject VC
Subject Venture capital
Subject Capital investments > Decision making
Subject Venture capital > Finance
Subject Venture capital > Decision making
Subject Investments
Subject Capital investments
Subject Capital investments > Evaluation
Subject Entrepreneurship
Subject Southeast Asia
Subject ASEAN
Subject Asia
Subject Entrepreneurship > Finance
Subject New business enterprises
Subject New business enterprises > Finance
Subject New business enterprises > Evaluation
Subject Startup company
Subject Unicorn company
Subject Founders
Subject Japan
Genre Text
Genre Thesis

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Earnheart-Gold, Sasha. (2022). How to Invest in the Next Unicorn: Venture Capital Investment Selection in Silicon Valley, Japan, and Southeast Asia. Stanford Digital Repository. Available at


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