Ideally, we would use population-level information about the propensity of firms to receive VC funding. Unfortunately, the propensity of technology firms to receive VC funding is not known generally, and hence we are unable to correct for this
problem (the rare-events methodology that we use assumes that the sample is representative). However,following the logic behind the rare-events bias, we can state with certainty that this problem will attenuate our estimates. In this regard, our hypothesis testing exercise is particularly conservative.The rare-events logit procedure also allows us to explore the sensitivity of the results to different assumptions about the baseline probability of technology firms to successfully obtain venture funding. The results are not sensitive to these assumptions