Venture capital investment performance: Based on innovation perspective of multi-factor effect

摘要

China's capital market is booming in recent years. Large numbers of starting-up companies are showing up, which attracts both domestic and foreign venture capital firms. This paper investigates the impact of venture capital investment on the impact of portfolio companies. The innovation and significance of this article lies in: 1) widened the dimension of the VC research: study the multi-factor effect on portfolio companies; 2) expanded the sample size: covering all the manufacturing companies in China that received venture investment between 1999 and 2014. We focus on the impact of foreign VC firms and domestic VC firms on the ROA performance of Chinese portfolio companies by conducting a Least Square Regression. The model shows that portfolio company industry, investment stage as well as capital managed by VC firms is factors significantly affect portfolio company performance. Specifically, we find that after controlling for eight factors, namely, China region, industry, syndicate size, stage indicator, company CEO experience, total venture capital investment, VC firm capital under management, and VC firm age, whether VC firm is domestic or foreign doesn't play an important role.