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The Performance of Venture-Backed Firms: The Effect of Venture Capital Company Characteristics

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  • Dirk Engel

Abstract

This paper deals with the empirical investigation of the question as to which type of venture capital (VC) companies determines the growth and survival of istics of VC companies as additional factors that explain the high variation of the employment growth rate of portfolio firms and their probability of surviving. Surprisingly, venture- backed firms financed by independent VC companies are not among the most successful firms. Independent VC companies are some of those with the greatest profit orientation and hence, a high quality of the value chain process is to be expected. Significantly higher employment growth rates are evident for firms financed by locally active VCs. Changes in the board of directors do not have a positive effect on firms' performance. Syndicated investment strategy seems to be a successful strategy.

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  • Dirk Engel, 2004. "The Performance of Venture-Backed Firms: The Effect of Venture Capital Company Characteristics," Industry and Innovation, Taylor & Francis Journals, vol. 11(3), pages 249-263.
  • Handle: RePEc:taf:indinn:v:11:y:2004:i:3:p:249-263 DOI: 10.1080/1366271042000265401
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    5. Kirzner, Israel M, 1999. "Creativity and/or Alertness: A Reconsideration of the Schumpeterian Entrepreneur," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 11(1-2), pages 5-17.
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    Cited by:

    1. Pere Arqué Castells, 2010. "Venture capital and innovation at the firm level," Working Papers 2010/12, Institut d'Economia de Barcelona (IEB).

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