Portfolio strategies of life science venture capital firms in the USA and Europe

Holger Patzelt (), Dodo zu Knyphausen-Aufseß and Yasmin Habib

Papers on Entrepreneurship, Growth and Public Policy from Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group

Abstract: Motivated by the different development stages of both, the venture capital (VC) as well as the life science industry in the USA and Europe, we investigate portfolio strategies of US-American and European VC firms active in this sector. We analyse portfolios of 88 VCs financing a total of 1050 life science ventures. Our results show that US life science VCs are equally likely to have a focus on early stage ventures and to diversify across investment stages as their European counterparts. However, the latter invest more in the US industry than vice versa, more in traditional life science technologies developing therapeutics and diagnostics, and less in new medical technology and healthcare/IT firms. Regarding the VCs' internationalisation strategies, our results reveal that VCs investing globally and US VCs focusing on their home market invest more in medical technology and healthcare/IT and less in diagnostics firms than European VCs with European investees only. We conclude that European life science ventures developing medical and healthcare/IT technologies should internationalise early enough into the USA in order to access the US VC market. Therapeutics and diagnostics companies in the USA, on the other hand, may find good opportunities to raise VC in Europe.

Pages: 42 pages
Date: 2005-11
New Economics Papers: this item is included in nep-eec, nep-ent, nep-ino and nep-tid
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
ftp://papers.econ.mpg.de/egp/discussionpapers/2005-31.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server papers.econ.mpg.de: No such host is known.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:esi:egpdis:2005-31

Ordering information: This working paper can be ordered from
http://www.econ.mpg. ... arch/EGP/discuss.php

Access Statistics for this paper

More papers in Papers on Entrepreneurship, Growth and Public Policy from Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group Contact information at EDIRC.
Bibliographic data for series maintained by Kerstin Schück ( this e-mail address is bad, please contact ).