Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation

Arbeitspapier

We examine the role of spatial proximity for Venture Capital (VC) investments in Germany. The main database is a survey of 85 personal interviews with representatives of different types of financial institutions. The analysis shows that spatial proximity is far less important for VC investments than is often believed. For example, the results indicate that syndication is partly used as an alternative to spatial proximity. Telecommunication does not work as a substitute for face-to-face contact. On the whole, regional proximity is not a dominant factor in VC partnerships. Therefore, the absence of VC firms in a region does not appear to cause a severe regional equity gap.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Papers on Entrepreneurship, Growth and Public Policy ; No. 1406

Classification and Topics

• Classification: Wirtschaft ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance ; Firm Behavior: Theory ; New Firms; Startups ; Size and Spatial Distributions of Regional Economic Activity
• Subject: Venture Capital ; spatial proximity ; start-up financing

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fritsch, Michael ; Schilder, Dirk
• Event: Veröffentlichung
• (who): Max Planck Institute of Economics
• (where): Jena
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/24912
• Last update: 10.03.2025, 11:42 AM CET