Does Academic Lineage Generate Excess Returns? Evidence from Deep-Tech Venture Capital

Investors in deep-tech startups often cannot evaluate the technology, so they rely on the founders' academic lineage: the university, the lab and the advisors behind a doctorate. This paper asks whether academic lineage generates excess returns, that is, whether it predicts a startup's success beyond the price investors pay for it. Lineage carries two kinds of information. Salient prestige, such as an elite university or a famous advisor, is visible at a glance. Lineage capital, the founding experience, networks and alumni record of a founder's lab, must be reconstructed from dissertations, co-authorships and company records. The sample is built from academic lineages rather than firms: starting from every doctoral advisor active from 1997 to 2015 in the physical sciences and engineering at eleven U.S. universities of four types, dissertation records, lab alumni pages and the Academic Family Tree trace their doctoral students and postdocs, and those trainees' own trainees, wherever they went, and these descendants are matched to the founders of U.S. venture-backed startups in photonics, quantum technologies, semiconductors, advanced materials and energy founded from 2000 to 2022. Three tests follow: whether lineage predicts late-stage financing and profitable exits; whether investors pay for it through higher valuations, larger rounds and stronger lead investors; and whether, conditional on the price paid, it still predicts milestones and, where valuations allow, risk-adjusted returns. No residual effect means lineage is priced, a positive effect means it is underpriced, and a negative effect means investors overpay. Following evidence that investors neglect ties that are not salient, we predict that salient prestige is priced and lineage capital is not. Case evidence from seven Harvard and MIT lineages motivates the design. This paper reports a pre-registered research design and pilot feasibility results; it does not yet report confirmatory estimates.