Venture Capital Performance: The Disparity Between Europe and the United States / Performances du capital risque: Les disparités entre l'Europe et les États-Unis
Ulrich Hege (),
Frédéric Palomino and
Additional contact information
Frédéric Palomino: Edhec Business School - Edhec Business School
Armin Schwienbacher: UCL - Université Catholique de Louvain
Post-Print from HAL
This paper compares the success of venture capital investments in the United States and in Europe by analyzing individual venture-backed companies and the value generated within the stage financing process. We document that US venture capitalists generate significantly more value with their investments than their European counterparts. We find differences in contracting behavior, such as staging frequency and syndication, and evidence that they help to explain the observed performance gap and we report a substantial unexplained residual. We find that US venture funds investing in Europe do not perform better their European peers. European Common Law and Civil Law countries exhibit comparable levels of venture performance, and differences in stock market development or tax subsidies in favor of venture investments are unrelated to performance differences. European IPO exits from venture investments yield returns similar to the US, while trade sale exits weakly underperform. We attribute the overall performance gap essentially to the segment of poorly performing companies.
Keywords: venture capital performance; financial development; stage financing; exit; monitoring (search for similar items in EconPapers)
Note: View the original document on HAL open archive server: https://hal-hec.archives-ouvertes.fr/hal-00493173
References: Add references at CitEc
Citations: Track citations by RSS feed
Published in Finance, 2009, Vol.30,nº1, pp.7-50
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00493173
Access Statistics for this paper
More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().