Do International Investors Enhance Private Firm Value?

52 Pages Posted: 3 Jun 2014 Last revised: 30 Sep 2019

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

April M. Knill

Florida State University College of Business; Florida State University - College of Law

Kelsey Syvrud

Florida State University; University of South Florida - Department of Finance

Date Written: May 19, 2014

Abstract

We examine the impact of international venture capital investors on private firm success spanning 69 countries over the years 1995-2010. The data examined indicate that, relative to deals in which the investor base is purely domestic, private firms that have an international venture capital syndicate have a higher probability of exiting via IPO and higher IPO proceeds, as well as higher total deal M&A values. These relationships, however, depend on the level of internationalization and hence imply a tradeoff between the strategic benefits associated with international investors and the costs associated with geographic, cultural and legal differences across countries.

Keywords: Venture Capital, Syndication, Acquisition, Portfolio Company, Deal Value, Proceeds

JEL Classification: E6, G2, K2

Suggested Citation

Cumming, Douglas J. and Knill, April M. and Syvrud, Kelsey, Do International Investors Enhance Private Firm Value? (May 19, 2014). Available at SSRN: https://ssrn.com/abstract=2441298 or http://dx.doi.org/10.2139/ssrn.2441298

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

April M. Knill

Florida State University College of Business ( email )

Tallahassee, FL 32306-1042
United States
(850) 644-2047 (Phone)

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

Kelsey Syvrud (Contact Author)

Florida State University ( email )

Tallahasse, FL 32306
United States

University of South Florida - Department of Finance ( email )

Tampa, FL 33620-5500
United States

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