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  1.  
  2. ANGELS 411
  3. Expected Returns
  4. SSRN-Whom You Know Matters: Venture Capital Networks and Investment Performance
« Age of the Angel: Best Practices for Angel Groups and Investors
Data and Trends in VC Funding »

SSRN-Whom You Know Matters: Venture Capital Networks and Investment Performance

17 Aug 2008   | Expected Returns

Tags: exit returns · venture capital

LINK TO ORIGINAL ARTICLE:
  • http://papers.ssrn.com/sol3/papers.cfm?abstract_id=631941

Many financial markets are characterized by strong relationships and networks, rather than arm’s-length, spot-market transactions. We examine the performance consequences of this organizational choice in the context of relationships established when VCs syndicate portfolio company investments. VC firms that enjoy more influential network positions have significantly better fund performance, as measured by the proportion of investments that are successfully exited through an IPO or sale to another company. Similarly, the portfolio companies of better-networked VC firms are significantly more likely to survive to subsequent financing and to eventual exit. Finally, we provide initial evidence on the evolution of VC networks.

>>> READ MORE at:
  • http://papers.ssrn.com/sol3/papers.cfm?abstract_id=631941
« Age of the Angel: Best Practices for Angel Groups and Investors
Data and Trends in VC Funding »

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