CROSS-BORDER VENTURE CAPITAL AND THE DEVELOPMENT OF PORTFOLIO COMPANIES

D. Devigne (), T. Vanacker, Sophie Manigart and I. Paeleman
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I. Paeleman: -

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: This paper studies how cross-border venture capital investors as opposed to domestic venture capital investors influence the development of their portfolio companies. For this purpose, we use a longitudinal research design and track sales from the year of initial venture capital investment up to seven years after this investment in 692 European technology-based companies. Findings demonstrate how companies backed by cross-border venture capital investors initially exhibit lower sales growth compared to companies backed by domestic investors. After a couple of years, however, companies backed by cross-border investors exhibit higher sales growth compared to companies backed by domestic investors. Finally, companies that raise finance from a syndicate comprising both domestic and cross-border investors develop into the biggest sales generators. Overall, this study provides a more textured understanding of the role played by venture capital investors as their portfolio companies develop and thereby require different resources or capabilities over time.

Keywords: venture capital; cross-border; international; portfolio company development (search for similar items in EconPapers)
JEL-codes: D92 G24 G32 G34 (search for similar items in EconPapers)
Pages: 2 pages
Date: 2010-12
New Economics Papers: this item is included in nep-cfn and nep-ent
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http://wps-feb.ugent.be/Papers/wp_10_694.pdf (application/pdf)

Related works:
Working Paper: Cross-border venture capital and the development of portfolio companies (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:10/694

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