Do venture capitalists succeed outside their comfort zone? : an empirical study of venture capital firms' performance as they move into new nations or industries
Year: 2014
Type: dissertation
Abstract: This thesis aims to analyze\nthe performance of venture capitalists\n(VCs)\nat the moment they\ninvest in new nations or industries.\nOur sample consists of 29,172\nventure capital back\ned\nentrepreneurial firms from 43\ndifferent nations in the 20\n-\nyear period from 1989 through\n2008. We use entrepreneurial firm exit by IPO or M&A as our metric for success\n. We find\nthat entrepreneurial\nfirms backed by syndicates of VCs\ninvesting\nin their industry for the\nfirst time are less likely to have a successful exit.\nHowever, these results\nturn out to be\ninsignificant when\nincluding year\n-\nfixed effects. When\nlooking a\nt\ns\nyndicates of VCs who\ninvest in\nnation\ns for the first time\nwe do not find any significant evidence that they perform\nbetter or worse than other VCs.\nWe also look at the performance of VCs who invest\nmarginally in foreign nations\nor\ninvest\nin industries\nt\nhat\nare\noutside\ntheir industry preference.\nWe do no\nt find any significant evidence that VC\ns\nwho\ninvest\nmarginally in foreign nations\nperform better or worse\nthan other VCs\n. However, we do\nfind some\nsignificant results\nindicating that entrepreneurial firms\nbacked by\nVCs investing\noutside their preferred\nindustry are less l\nikely to have a successful exit.
Source: BIBSYS Brage (BIBSYS (Norway))
Author: Bjørn Harald Johansen
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2463287044