Do venture capitalists succeed outside their comfort zone? : an empirical study of venture capital firms' performance as they move into new nations or industries

摘要

This thesis aims to analyzethe performance of venture capitalists(VCs)at the moment theyinvest in new nations or industries.Our sample consists of 29,172venture capital backedentrepreneurial firms from 43different nations in the 20-year period from 1989 through2008. We use entrepreneurial firm exit by IPO or M&A as our metric for success. We findthat entrepreneurialfirms backed by syndicates of VCsinvestingin their industry for thefirst time are less likely to have a successful exit.However, these resultsturn out to beinsignificant whenincluding year-fixed effects. Whenlooking atsyndicates of VCs whoinvest innations for the first timewe do not find any significant evidence that they performbetter or worse than other VCs.We also look at the performance of VCs who investmarginally in foreign nationsorinvestin industriesthatareoutsidetheir industry preference.We do not find any significant evidence that VCswhoinvestmarginally in foreign nationsperform better or worsethan other VCs. However, we dofind somesignificant resultsindicating that entrepreneurial firmsbacked byVCs investingoutside their preferredindustry are less likely to have a successful exit.