Abstract
This paper explores the knowledge-related factors explaining the timing of entry of VC firms into new technological waves. On one hand, we argue that the firm's prior investment expertise facilitates early entry by enabling the firm to deal better and benefit from the uncertainty surrounding a new technology. On the other hand, the firm's knowledge concentration and distance as well as the ossification associated with its age impede such entry. We found empirical support for these notions in the history of US venture capital investment activity from 1962 to 2004. The results are consistent across four technology cycles that span the above period - semiconductors, hardware, biotechnology, and internet - suggesting good generalizability of our results. We contribute to the literature of decision making under uncertainty by highlighting the endogenous role that the decision maker plays in this process.