Relocation to Get Venture Capital: A Resource Dependence Perspective
Entrepreneurship Theory and Practice, Forthcoming
Posted: 18 Sep 2017
Date Written: September 14, 2017
Using a resource dependence perspective, we theorize and show that non-venture-capital-backed ventures founded in U.S. states with a lower availability of venture capital (VC) are more likely to relocate to California (CA) or Massachusetts (MA) — the two VC richest states — compared to ventures founded in states with a greater availability of VC. Moreover, controlling for self-selection, ventures that relocate to CA or MA subsequently have a greater probability of attracting initial VC compared to ventures that stay in their home state. We discuss the implications for theory, future research, and practice.
Keywords: entrepreneurial firms; venture capital; relocation; first round
JEL Classification: M13, G24
Suggested Citation: Suggested Citation