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Does venture capital pay off? a meta-analysis on the relationship between venture capital involvement and firm performance

Rosenbusch, Nina and Muller, V. (2010) Does venture capital pay off? a meta-analysis on the relationship between venture capital involvement and firm performance. Frontiers of Entrepreneurship, 30 (3).

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    Abstract

    Venture capital (VC) as an alternative to mainstream corporate finance (Wright and Robbie, 1998) has attracted a large amount of interest in academic research and among practitioners. On e of the main questions is whether VC adds value to firms. Yet, empirical research results are highly inconsistent. Venture capitalists do not only provide capital and monitoring, but also actively assist firms with industry-specific knowledge and skills (MacMillan et al., 1989). Furthermore, they increase the legitimacy of entrepreneurial firms (Zimmerman & Zeitz, 2002). On the other hand, venture capitalists may pressure firms to an initial public offering (IPO) in a premature stage of their life cycle (Gompers, 1996). High costs associated with an IPO may, in turn, decrease profitability and even endanger the survival of firms. Whether venture capital really pays off, thus, largely depends on contextual factors. The aim of this study is to provide a review and synthesis of existing empirical research on the relationship between VC and firm performance. Specifically, we intend to answer two research questions: (1) Does VC increase the performance of firms? (2) Which variables moderate this relationship?

    Item type: Article
    ID code: 39703
    Keywords: entrepreneur, venture capital, firm performance, pay off, meta-analysis, relationship, Commerce, Management. Industrial Management
    Subjects: Social Sciences > Commerce
    Social Sciences > Industries. Land use. Labor > Management. Industrial Management
    Department: Strathclyde Business School > Hunter Centre For Entrepreneurship
    Related URLs:
    Depositing user: Pure Administrator
    Date Deposited: 15 May 2012 10:40
    Last modified: 06 Sep 2014 13:41
    URI: http://strathprints.strath.ac.uk/id/eprint/39703

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