Venture Capital Exits in Canada and the United States

109 Pages Posted: 24 Oct 2002

See all articles by Jeffrey G. MacIntosh

Jeffrey G. MacIntosh

University of Toronto - Faculty of Law

Douglas J. Cumming

Florida Atlantic University


Venture capital exit vehicles enable, to different degrees, mitigation of informational asymmetries and agency costs between the entrepreneurial venture and the new owners of the firm. Different exit vehicles also affect the amount of new capital for the entrepreneurial firm. Based on these factors, we conjecture the efficient pattern of exits depending on the quality of the entrepreneurial venture, the nature of its assets, and the duration of venture capital investment. We empirically assess the significance of these factors using a multinomial logit model. Our comparative results between Canada and the U.S. provide insight into the impact of different institutional and legal constraints, and suggest such constraints have distorted the efficient pattern of exits in Canada.

JEL Classification: G24, G28, G32, G38, K22

Suggested Citation

Macintosh, Jeffrey G. and Cumming, Douglas J., Venture Capital Exits in Canada and the United States. University of Toronto Law Journal, Vol. 53, pp. 101-200, 2003. Available at SSRN: or

Jeffrey G. Macintosh

University of Toronto - Faculty of Law ( email )

78 and 84 Queen's Park
Toronto, Ontario M5S 2C5
416-978-5795 (Phone)
416-978-2648 (Fax)

Douglas J. Cumming (Contact Author)

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States


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