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Differences in Performance of Independent and Finance-Affiliated Venture Capital Firms

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  • Kangmao Wang
  • Clement K. Wang
  • Qing Lu

Abstract

We examine the differences in the investment behavior of independent and finance-affiliated venture capital firms (VCFs). We find that differences in internal management mechanisms and staff backgrounds lead to external performance differences. Using VC-backed companies listed in Singapore as our sample, we find significant differences between these two types of VCFs in industry preference, investment duration, VCF syndication, number of board seats, initial underpricing, and long-term market returns. Independent VCFs add more value to their portfolios. Thus, we conclude that the participation of independent VCFs is an important corporate-level factor for the success of the venture capital market. Southern Finance Association and the Southwestern Finance Association.

Suggested Citation

  • Kangmao Wang & Clement K. Wang & Qing Lu, 2002. "Differences in Performance of Independent and Finance-Affiliated Venture Capital Firms," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 25(1), pages 59-80.
  • Handle: RePEc:bla:jfnres:v:25:y:2002:i:1:p:59-80
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    References listed on IDEAS

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    1. Hamao, Yasushi & Packer, Frank & Ritter, Jay R., 2000. "Institutional affiliation and the role of venture capital: Evidence from initial public offerings in Japan," Pacific-Basin Finance Journal, Elsevier, vol. 8(5), pages 529-558, October.
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    Cited by:

    1. Sun, Yue & Uchida, Konari & Matsumoto, Mamoru, 2013. "The dark side of independent venture capitalists: Evidence from Japan," Pacific-Basin Finance Journal, Elsevier, vol. 24(C), pages 279-300.
    2. Das, Sanjiv R. & Jo, Hoje & Kim, Yongtae, 2011. "Polishing diamonds in the rough: The sources of syndicated venture performance," Journal of Financial Intermediation, Elsevier, vol. 20(2), pages 199-230, April.
    3. Agnieszka Slomka-Golebiowska, 2014. "Bankers on boards as corporate governance mechanism: evidence from Poland," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 18(4), pages 1019-1040, November.

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