A dynamic duration approach to venture capital exit

Yuet-Yee Wong

Finance Research Letters, 2024, vol. 68, issue C

Abstract: This study explores the extent to which correlated multiple stage funding explains variation in the speed of venture exit. I cast venture capital matches in a multivariate survival setting. I construct a panel of nascent entrepreneurs using SDC Platinum-VentureXpert (1990–2000) and use it to estimate the model. I find significant correlation across funding stages. Market effects is the most important factor in explaining the systematic variation in venture exits, while eliminating unobserved heterogeneity explains about a third of the variation. Conventional estimates that assume venture capital exits being driven by static exposure or by observable factors alone are upward biased.

Keywords: Venture capital exit; Stage funding; SDC VentureXpert (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:68:y:2024:i:c:s1544612324009619

DOI: 10.1016/j.frl.2024.105931

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