Asset Liquidity and Venture Capital Investment

Giang Nguyen and Vinh Vo
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Giang Nguyen: Waseda University [Tokyo, Japan]
Vinh Vo: UEH - University of Economics Ho Chi Minh City

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Abstract: "We examine the relationship between asset market liquidity and venture capital (VC) investment and find that it is inverted U-shaped. Asset liquidity and VC investment are positively related for low levels of asset liquidity but negatively related for higher levels of asset liquidity. We also document evidence that VC firms with more industry experience invest more in a liquid asset market than those without industry experience or with significant experience in other industries. Portfolio companies obtained their first investment in a liquid asset market are less likely to exit successfully; however, given a successful exit, they prefer to exit through mergers and acquisitions rather than going public."

Keywords: Asset liquidity; Venture capital; Investment; Experience; Success (search for similar items in EconPapers)
Date: 2021-08-01
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Published in Journal of Corporate Finance, 2021, 69 (69), 18 p. ⟨10.1016/j.jcorpfin.2021.101963⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04325667

DOI: 10.1016/j.jcorpfin.2021.101963

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