How and When Investment Horizons Determine Venture Capital Firms’ Attention Breadth to Portfolio Companies

Violetta Bacon-Gerasymenko, Jonathan D. Arthurs and Sam Y. Cho

Entrepreneurship Theory and Practice, 2020, vol. 44, issue 3, 475-503

Abstract: This study develops and tests a theory about the antecedents of venture capital firms’ (VCs’) attention breadth to their portfolio companies (PFCs). We find that VCs expand their attention breadth but only up to a certain level of expected investment horizons for each PFC, after which attention breadth narrows. We also find that this inverted U-shaped relationship is contingent upon the VC investment horizon dispersion and the number of co-investors in a given PFC. Our research advances the entrepreneurship and venture capital literature and provides novel insight into the broader literature on investment horizons and strategic alliances.

Keywords: venture capital; attention breadth; expected investment horizons; investment horizon dispersion; syndication (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:44:y:2020:i:3:p:475-503

DOI: 10.1177/1042258718824957

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