I like how you think: The role of cognitive similarity as a decision bias

We decompose the decision-making processes of a sample of venture capitalists (VCs), investigating the degree to which 'cognitive similarity' (shared patterns of reasoning between the investor and the founder) is related to the VCs' evaluations of prospective venture deals.' Employing conjoint analysis and hierarchical linear modeling techniques, we model the VCs' assessment of a series of venture deals as a function of three attributes: the economics of the opportunity, the human capital of the founder, and the reasoning patterns of the founder. We find VCs prefer to invest in founders who demonstrate patterns of reasoning similar to their own. Further, we find that when cognitive similarity is present, the relative importance of the entrepreneur's human capital becomes even more important in the VCs' assessment of the venture deal.