Venture Capital Ownership Type, Investment Criteria, and Venture Performance

46 Pages Posted: 8 Dec 2009

See all articles by Na Dai

Na Dai

SUNY at Albany - School of Business

Hoje Jo

Santa Clara University

Sul

University of New Mexico

Multiple version iconThere are 2 versions of this paper

Date Written: September 1, 2009

Abstract

We investigate the investment behavior and exit performance of VCs that have pursued expansion outside their home locations. Our findings indicate that in the Asian VC markets, foreign VCs have relative advantages over local VCs in terms of size and experience while they are at disadvantage in information collection and monitoring due to distance. When investing alone, foreign VCs are more likely to invest in more information-transparent ventures. Networks with local VCs help alleviate information asymmetry and monitoring problem. Foreign VC investments overall are more likely to succeed. Ventures financed by foreign and local VCs jointly outperform those invested by foreign VCs alone.

Keywords: Venture Capital, Ownership Type, Proximity, Information Asymmetry, Network, Venture Performance

JEL Classification: G24, G32

Suggested Citation

Dai, Na and Jo, Hoje and Kassicieh, Suleiman K., Venture Capital Ownership Type, Investment Criteria, and Venture Performance (September 1, 2009). SCU Leavey School of Business Research Paper No. 09-02, Available at SSRN: https://ssrn.com/abstract=1512012 or http://dx.doi.org/10.2139/ssrn.1512012

Na Dai

SUNY at Albany - School of Business ( email )

1400 Washington Ave.
Albany, NY 12222
United States

Hoje Jo (Contact Author)

Santa Clara University ( email )

Santa Clara, CA 95053
United States
408-224-8890 (Phone)
408-554-4029 (Fax)

Suleiman K. Kassicieh

University of New Mexico ( email )

MSC 05-3090
U of New Mexico
Albuquerque, NM 87131
United States

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