Start-up companies financed by venture capitalists have a much lower failure rate than companies financed by other means. Source of financing, ttherefore, must be a more important causative factor in the success of a start-up company than are such factors as the personal characteristics of the entrepreneur, the quality of strategic planning, or the management structure of the company.
The statement that venture capitalists base their decisions to fund start-up companies on such factors as the characteristics of the entrepreneur and quality of strategic planning of the company most seriously weakens the argument above.