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Portfolio investment strategies in the Finnish venture capital industry: A longitudinal study

Author

Listed:
  • Dirk De Clercq
  • Philip K. Goulet
  • Mikko Kumpulainen
  • Manu Mäkelä

Abstract

The objective of this study is to identify realized strategies of venture capital firms when undertaking portfolio investments. We analysed data for the period 1994 through 1997 on a sample of Finnish venture capital firms representing virtually the entire population of the Finnish venture capital industry. The results indicate that, over time, the venture capital firms specialized the industry scope of their portfolio. Further, the venture capital firms consistently diversified geographically throughout the 4 year period of the study, and they diversified their portfolio in terms of stage-of-growth by investing in increasingly later stage companies through the first years of the study, before entering a period of equilibrium in which this degree of stage-of-growth diversification held relatively constant. Finally, the importance of accumulated experience was illustrated by the finding that less experienced venture capital firms showed a time lag in these investment patterns compared to more experienced firms.

Suggested Citation

  • Dirk De Clercq & Philip K. Goulet & Mikko Kumpulainen & Manu Mäkelä, 2001. "Portfolio investment strategies in the Finnish venture capital industry: A longitudinal study," Venture Capital, Taylor & Francis Journals, vol. 3(1), pages 41-62, January.
    • Handle: RePEc:taf:veecee:v:3:y:2001:i:1:p:41-62
    DOI: 10.1080/13691060116688
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    Citations

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    Cited by:

    1. Dimo Dimov & Dirk De Clercq, 2006. "Venture Capital Investment Strategy and Portfolio Failure Rate: A Longitudinal Study," Entrepreneurship Theory and Practice, , vol. 30(2), pages 207-223, March.
    2. Sophie Pommet, 2013. "The Impact of Venture Capital Investment Duration on the Survival of French IPOs," GREDEG Working Papers 2013-32, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    3. D. De Clercq & D. P. Dimov, 2004. "Explaining venture capital firms’ syndication behavior: A longitudinal study," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/279, Ghent University, Faculty of Economics and Business Administration.
    4. Kolympiris, Christos & Kalaitzandonakes, Nicholas & Miller, Douglas, 2011. "Spatial collocation and venture capital in the US biotechnology industry," Research Policy, Elsevier, vol. 40(9), pages 1188-1199.
    5. Sophie Pommet, 2013. "The impact of venture capital investment duration on the survival of French IPOs," Working Papers halshs-00923957, HAL.

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