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Spatial proximity in venture capital investments and assets intangibility

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  • Cai, Xinyue
  • Li, Peigong
  • Zhu, Wanwan

Abstract

This study investigates the investment distance between Venture Capital funds (VCs) and their investable ventures focusing on the relevance of intangible assets based on UK data. We find that investees with a higher level of intangible assets on their balance sheet receive VC finance from more proximate VC funds. However, investees with more patents, reflecting the economic value of intangibles, receive VC finance from more distant VC funds. Moreover, the positive effects of patents on investment distance are stronger for younger VCs. On the other hand, the number of registered trademarks only positively affects investment distance for non-tech investees at the seed stage.

Suggested Citation

  • Cai, Xinyue & Li, Peigong & Zhu, Wanwan, 2025. "Spatial proximity in venture capital investments and assets intangibility," International Review of Financial Analysis, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:finana:v:106:y:2025:i:c:s1057521925005514
    DOI: 10.1016/j.irfa.2025.104464
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