From In-Person To Online: The New Shape of the VC Industry

75 Pages Posted: 20 Sep 2022 Last revised: 26 Sep 2023

See all articles by Liudmila Alekseeva

Liudmila Alekseeva

KU Leuven

Silvia Dalla Fontana

Swiss Finance Institute; USI Lugano

Caroline Genc

Université Paris-Dauphine, PSL Research University

Hedieh Rashidi Ranjbar

University of Michigan, Stephen M. Ross School of Business

Date Written: August 23, 2022

Abstract

This paper asks whether geographical clustering and in-person interactions are still essential features of the venture capital (VC) industry in the age of online communications. Exploring how VCs respond to an unexpected interruption in face-to-face meetings during the Covid-19 pandemic, we document that they break their traditional norm by investing in more distant startups. This evolution goes along with several changes in selection criteria and VCs' syndication process. Overall, our study reveals that online interactions cannot perfectly substitute for in-person meetings and helps us understand how VCs revisit their investment model.

Keywords: Venture Capital, Soft Information, Investment Selection, Syndication

JEL Classification: G23, G24, L26

Suggested Citation

Alekseeva, Liudmila and Dalla Fontana, Silvia and Genc, Caroline and Rashidi Ranjbar, Hedieh, From In-Person To Online: The New Shape of the VC Industry (August 23, 2022). IESE Business School Working Paper , Université Paris-Dauphine Research Paper No. 4198138, Available at SSRN: https://ssrn.com/abstract=4198138 or http://dx.doi.org/10.2139/ssrn.4198138

Liudmila Alekseeva (Contact Author)

KU Leuven ( email )

Naamsestraat
69
Leuven, Flanders 3000
Belgium

Silvia Dalla Fontana

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

USI Lugano ( email )

Via Giuseppe Buffi 13
Lugano, TN Ticino 6900
Switzerland

Caroline Genc

Université Paris-Dauphine, PSL Research University ( email )

Place du Maréchal de Lattre de Tassigny
Paris, 75016
France

Hedieh Rashidi Ranjbar

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

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