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How and When Investment Horizons Determine Venture Capital Firms’ Attention Breadth to Portfolio Companies

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  • Violetta Bacon-Gerasymenko
  • Jonathan D. Arthurs
  • Sam Y. Cho

Abstract

This study develops and tests a theory about the antecedents of venture capital firms’ (VCs’) attention breadth to their portfolio companies (PFCs). We find that VCs expand their attention breadth but only up to a certain level of expected investment horizons for each PFC, after which attention breadth narrows. We also find that this inverted U-shaped relationship is contingent upon the VC investment horizon dispersion and the number of co-investors in a given PFC. Our research advances the entrepreneurship and venture capital literature and provides novel insight into the broader literature on investment horizons and strategic alliances.

Suggested Citation

  • Violetta Bacon-Gerasymenko & Jonathan D. Arthurs & Sam Y. Cho, 2020. "How and When Investment Horizons Determine Venture Capital Firms’ Attention Breadth to Portfolio Companies," Entrepreneurship Theory and Practice, , vol. 44(3), pages 475-503, May.
    • Handle: RePEc:sae:entthe:v:44:y:2020:i:3:p:475-503
    DOI: 10.1177/1042258718824957
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