Screening due diligence #6 Quality of the origin

Does the origin of the company conform to successful patterns?

A sixth screening mechanism used by some venture capitalists involves an examination of companies' origins. They feel much more comfortable with companies whose origins resemble those with whom they have met success in the past - that confirm to successful and familiar patterns. For example, venture capitalists are used to backing companies started by well-known executives who have to backing companies started by well-known executives who have "spun out" of established, market-leading companies, or by well-known university professors who have developed cutting-edge innovations, or by hungry and brilliant graduate students who have happened on the "next big thing" during their studies. Companies with these origins, and others conforming to other patterns of success, tend to find venture backing relatively easily. On the other hand, companies that have questionable or unusual origins may find that venture capitalists are very tight-fisted. Recognizing patterns of success makes sense for venture capitalists, because parrern, by their nature, repeat themselves; all things being equal, companies whose origins conform to successful patterns tend to be success themselves.