We examine the dilemma of ethnic investors in using ethnic network ties to invest by extending the ‘ethnic enclave' concept to incorporate two dimensions: social network and social status. Our analysis of the first round of venture capital funding in Silicon Valley from 1976 to 2004 shows a...

The entrepreneurship literature suggests that network ties are useful in mitigating the problem of information asymmetry faced by entrepreneurs when acquiring resources at the early stage of venture creation. We introduce prior knowledge of resource owners as an inverse measure of information...