Geographical and institutional distances in venture capital deals: How syndication and experience drive internationalization patterns

Arbeitspapier

Drawing on a novel dataset of worldwide venture capital deals, we investigate how venture capitalists (VCs) overcome the complexity of investing in geographically and institutionally distant regions. Our results indicate that syndicating with local VCs is a common way for foreign VCs to gain deal access, overcome the complexity of investing in distant regions and offset their lack of within-country experience. The foreign VC's distance from the portfolio company ceases to be a serious investment obstacle when he can rely on a highly experienced local VC. Our results further suggest that inexperienced VCs, i.e. those VCs with a large need for syndication, increase their chances to invest across borders when they invest in small deals jointly with local inexperienced partners.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 11-022

Classification and Topics

• Classification: Wirtschaft ; International Investment; Long-term Capital Movements ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
• Subject: Multiple Regression Analysis ; Syndicates ; Venture Capital ; Internationalization ; Distance ; Experience

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tykvová, Tereza ; Schertler, Andrea
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/44989
• URN: urn:nbn:de:bsz:180-madoc-31675
• Last update: 10.03.2025, 11:43 AM CET