The impact of venture capital monitoring

• Autores: Shai Bernstein, Xavier Giroud, Richard R. Townsend
• Localización: The Journal of finance, ISSN 0022-1082, Vol. 71, Nº 4, 2016, págs. 1591-1622
• Idioma: inglés
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• Dialnet Métricas: 1 Cita
• Resumen

  • We show that venture capitalists' (VCs) on-site involvement with their portfolio companies leads to an increase in both innovation and the likelihood of a successful exit. We rule out selection effects by exploiting an exogenous source of variation in VC involvement: the introduction of new airline routes that reduce VCs' travel times to their existing portfolio companies. We confirm the importance of this channel by conducting a large-scale survey of VCs, of whom almost 90% indicate that direct flights increase their interaction with their portfolio companies and management, and help them better understand companies' activities.