Strategic Sorting and Disequilibrium in Venture Capital Markets: A Qualitative Literature Review on Value-Added and Investment Efficiency
DOI:
https://doi.org/10.70142/kbijmaf.v3i2.482Keywords:
Venture Capital, Strategic Sorting, Investment Efficiency, Value-Added, Market DisequilibriumAbstract
This qualitative literature review examines how strategic sorting mechanisms and persistent disequilibrium shape value-added and investment efficiency in venture capital (VC) markets. Drawing on recent empirical and theoretical studies, the review uncovers how information asymmetry, geographic clustering, and investor-founder alignment contribute to uneven capital allocation. While some venture capitalists actively enhance firm growth, others offer minimal value beyond funding, leading to inefficiencies. The findings highlight that VC markets do not always reward the most innovative firms but rather those aligned with dominant heuristics and networks. This review calls for a more inclusive and context-sensitive approach to VC evaluation, emphasizing the need for broader geographic coverage and alternative investment frameworks.
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