Thomas F Hellman recently appointed Director of the W. Maurice Young Entrepreneurship and Venture Capital Research Centre and others have recently completed a major study of the involvement of Venture Capitalists with their portfolio companies. VCs who have partners with industry experience are involved in such matters as the recruitment of executives to their companies and greatly increase the success of the companies. Or as the paper says “After controlling for endogeneity, investor activism is shown to be positively related to the success of portfolio companies”.
“Who are the active investors? Evidence from venture capital” with Laura Bottazzi and Marco Da Rin, Forthcoming, Journal of Financial Economics .
The analysis is based on a hand-collected dataset of European venture capital investments. The data covers the period 1998-2001, and consists of a sample of venture capital deals in 17 European countries. Our primary data source is a survey of venture capital firms, which we augmented with numerous secondary sources. Our dataset consists of information on 119 venture capital firms, 503 partners, and 1,652 portfolio companies. The data collection required considerable time and effort, but resulted in a dataset that is significantly larger than other hand-collected datasets on venture capital, and much richer than commercially available datasets.
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