A lack of insight: Do venture capitalists really understand their own decision processes?

The venture capitalist (VC) decision process receives much attention within entrepreneurship literature. The majority of these studies rely on post hoc methodologies to capture the decision process. Post hoc methods assume that VCs can accurately relate their decision processes, but studies from cognitive psychology suggest that people, in particular experts, are poor at introspecting. Introspection typically suffers from rationalization and post hoc recall biases. As such, past research may be misleading. Using social judgment theory and the associated lens model as a framework, a study investigates how well VCs introspect. It appears that VCs do not have strong insight, especially when confronted with information-rich situations such as they face in making an investment decision.