This study investigates how venture capitalists (VCs) balance upside potential and downside risk across investment stages. Drawing on the attention-based view, we propose a situated attention mechanism—that is, the investment stage represents a situational consideration affecting VC’s attention allocation to different risk dimensions. We argue that varying staging situations drive VCs to prioritize upside potential in the initial stage yet downside risk in the subsequent stage. As such, VCs may initially favor a risky project, but subsequently devalue it. We further propose that these effects are contingent on number of VCs on market, start-up maturity, and VC attention constraints. Our empirical results support our predictions.

中文翻译：

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重新审视诱饵：关注风险投资家分阶段投资的上行潜力与下行风险


本研究调查了风险投资家 (VC) 如何在各个投资阶段平衡上行潜力和下行风险。借鉴基于注意力的观点，我们提出了一种情境注意力机制，即投资阶段代表了一种情境考虑，影响着风险投资对不同风险维度的注意力分配。我们认为，不同的分期情况会促使风投优先考虑初始阶段的上行潜力，而优先考虑后续阶段的下行风险。因此，风险投资最初可能会青睐一个有风险的项目，但随后就会使其贬值。我们进一步提出，这些影响取决于市场上风险投资的数量、初创企业的成熟度和风险投资的注意力限制。我们的实证结果支持我们的预测。