The Performance of Venture-Backed Firms: The Effect of Venture Capital Company Characteristics

Dirk Engel

Industry and Innovation, 2004, vol. 11, issue 3, 249-263

Abstract: This paper deals with the empirical investigation of the question as to which type of venture capital (VC) companies determines the growth and survival of istics of VC companies as additional factors that explain the high variation of the employment growth rate of portfolio firms and their probability of surviving. Surprisingly, venture- backed firms financed by independent VC companies are not among the most successful firms. Independent VC companies are some of those with the greatest profit orientation and hence, a high quality of the value chain process is to be expected. Significantly higher employment growth rates are evident for firms financed by locally active VCs. Changes in the board of directors do not have a positive effect on firms' performance. Syndicated investment strategy seems to be a successful strategy.

Date: 2004
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DOI: 10.1080/1366271042000265401

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