A review of the literature draws some interesting conclusions on the performance of venture capital investors.
How's this for a catchy title "Factors Determining the Performance of Early Stage High-Technology Venture Capital Funds – A Review of the Academic Literature"? It comes to you courtesy of the Department of Trade and Industry in the UK. In particular, the Small Business Service (SBS).
The abstract of the paper, by Anna Söderblom of the Stockholm School of Economics, tells us that its purpose is "to document academic research concerning factors influencing the performances of venture capital funds, as well as the venture capital fundraising decisions".
We'll cheat by leaving it to the abstract to tell the story, without even delving into the executive summary let alone the text itself. Here we read that "Industry specialisation, large fund sizes, strong deal flow, syndication of investments, and especially, experience, all appear to be factors leading to superior investment performance, which is particularly well illustrated by the US venture capital industry. The review also concludes that venture capital fund returns to a great extent depend on an early or later stage focus, and the timing of the fundraisings."
There will be little surprise by the announcement that "In terms of geographical differences, the UK venture capital situation appears to be somewhere half way between the US and the continental Europe." The paper does, though, support its assertions with lots of analysis of publications, a five-page list no less.
Looking beyond the first page, we read that "Specialized VC firms, focusing on investments in a limited number of industry sectors, turn out to perform better than generalist VCs with a broad sector focus." Lots more like that to chew on.
The abstract of the paper, by Anna Söderblom of the Stockholm School of Economics, tells us that its purpose is "to document academic research concerning factors influencing the performances of venture capital funds, as well as the venture capital fundraising decisions".
We'll cheat by leaving it to the abstract to tell the story, without even delving into the executive summary let alone the text itself. Here we read that "Industry specialisation, large fund sizes, strong deal flow, syndication of investments, and especially, experience, all appear to be factors leading to superior investment performance, which is particularly well illustrated by the US venture capital industry. The review also concludes that venture capital fund returns to a great extent depend on an early or later stage focus, and the timing of the fundraisings."
There will be little surprise by the announcement that "In terms of geographical differences, the UK venture capital situation appears to be somewhere half way between the US and the continental Europe." The paper does, though, support its assertions with lots of analysis of publications, a five-page list no less.
Looking beyond the first page, we read that "Specialized VC firms, focusing on investments in a limited number of industry sectors, turn out to perform better than generalist VCs with a broad sector focus." Lots more like that to chew on.
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