Abstract
We aim to ascertain to what extent the better performance of European venture capital (VC)- backed firms in high-tech industries is due to either ‘screening’ or ‘value added’ provided by VC investors. We compare portfolio firms’ productivity growth before and after the first VC round, using a matched control group as benchmark. We show that productivity growth is not significantly different between VC and non-VC-backed firms before the first round of VC financing, whereas significant differences are found in the first years after the investment event. We also find that the value-adding services provided by VC investors 'imprint' the portfolio firm.
Original language | English |
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Pages (from-to) | 489-510 |
Number of pages | 22 |
Journal | Journal of Business Venturing |
Volume | 28 |
DOIs | |
Publication status | Published - 2013 |
Externally published | Yes |
Keywords
- Entrepreneurial firms
- Imprinting effect
- Screening
- Value added
- Venture capital