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

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: 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