Getting Tired of Your Friends: The Dynamics of Venture Capital Relationships

Qianqian Du and Thomas Hellmann ()

No 26274, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Does doing more deals together always strengthen investor relationships? Based on the relationships of the top 50 US venture capital firms, this paper focuses on the strengths of relationships and their dynamic evolution. Empirical estimates indicate that having a deeper relationship leads to fewer, not more future coinvestments. Moreover, deeper relationships lead to lower exit performance, even after controlling for endogeneity. Interestingly, deeper relationships first lead to lower performance, and subsequently lead to a slowdown in the relationship intensity. Relationship effects are more negative for VC firms with less central network positions, and for deals made in “hot” investment markets.

JEL-codes: G24 (search for similar items in EconPapers)
Date: 2019-09
New Economics Papers: this item is included in nep-cfn and nep-sbm
Note: CF PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as Qianqian Du & Thomas Hellmann, 2024. "Getting Tired of Your Friends: The Dynamics of Venture Capital Relationships," Journal of Financial Intermediation, .

Downloads: (external link)
http://www.nber.org/papers/w26274.pdf (application/pdf)

Related works:
Journal Article: Getting tired of your friends: The dynamics of venture capital relationships (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:26274

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26274

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().