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...

Venture capital firms predominantly source investments from local networks within tight geographic bounds. Against that pattern, VCs are increasingly investing internationally—but with substantial heterogeneity across firms in extent, location, and success. We propose a mechanism to explain...