My colleague, Isin Guler, has just published a fascinating study in one of our more erudite management journals. In an exhaustive look at investments made by venture capital companies, she finds that as funding rounds proceed, expected returns to the investment decline. You would think that a hard-nosed VC would just shut the loser down, wouldn’t you? Turns out, not so. In fact, the likelihood of a venture being terminated as a result of poor performance actually declines as more rounds of financing are completed. Isin (a professor at the University of North Carolina at Chapel Hill) suggests that political agendas, the desire to look good before one’s colleagues, a reluctance to admit defeat and giving too much weight to sunk costs all come into play.