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Cross-Border Venture Capital And The Development Of Portfolio Companies

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  • D. DEVIGNE

    ()

  • T. VANACKER
  • S. MANIGART
  • I. PAELEMAN
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    Abstract

    This paper studies how cross-border venture capital investors as opposed to domestic venture capital investors influence the development of their portfolio companies. For this purpose, we use a longitudinal research design and track sales from the year of initial venture capital investment up to seven years after this investment in 692 European technology-based companies. Findings demonstrate how companies backed by cross-border venture capital investors initially exhibit lower sales growth compared to companies backed by domestic investors. After a couple of years, however, companies backed by cross-border investors exhibit higher sales growth compared to companies backed by domestic investors. Finally, companies that raise finance from a syndicate comprising both domestic and cross-border investors develop into the biggest sales generators. Overall, this study provides a more textured understanding of the role played by venture capital investors as their portfolio companies develop and thereby require different resources or capabilities over time.

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    File URL: http://www.feb.ugent.be/nl/Ondz/wp/Papers/wp_10_694.pdf
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    Bibliographic Info

    Paper provided by Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 10/694.

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    Length: 2 pages
    Date of creation: Dec 2010
    Date of revision:
    Handle: RePEc:rug:rugwps:10/694

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    Related research

    Keywords: venture capital; cross-border; international; portfolio company development;

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