From in-person to online: the new shape of the VC industry

Liudmila Alekseeva, Silvia Dalla Fontana, Caroline Genc and Hedieh Rashidi Ranjbar

No 3pc4z, SocArXiv from Center for Open Science

Abstract: Geographical clustering is an essential feature of the venture capital (VC) industry as proximity helps VCs to acquire soft information about early-stage companies and to conduct post-investment activities. However, whether the VC investment model based on in-person interactions is still justified in the age of online communication technologies remains an open question. In this paper, we address this question by using an unexpected interruption in face-to-face meetings during the recent pandemic. We document that VCs respond to this change by breaking their traditional norm: they invest in more distant startups. We find that this evolution goes along with selection criteria and syndication process changes despite some persisting behaviors. Thus, our study helps to understand how VCs revisit their investment model and sheds light on the value of in-person interactions for the VC industry.

Date: 2022-08-22
New Economics Papers: this item is included in nep-ent, nep-ict and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://osf.io/download/63203e39582f8c08f788c6ce/

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:osf:socarx:3pc4z

DOI: 10.31219/osf.io/3pc4z

Access Statistics for this paper

More papers in SocArXiv from Center for Open Science
Bibliographic data for series maintained by OSF ().