We examine the dynamics of the positive sorting in the venture capital industry. Our findings indicate that switching lead VCs is not uncommon during the course of entrepreneurial firms' development. Companies with upwardly revised perceived quality are more likely to switch to more reputable...

We examine the dynamics of the positive sorting in the venture capital industry. We empirically show that there is considerable re-balancing of the VC-company matches. We further find that higher-quality companies associated with less reputable VCs are more likely to switch to more reputable...