Abstract

On the cross borders of growth literature and venture capital literature, quite a lot of research has been done on the impact of VC on company growth. The confusion on the role of VC however remains. This confusion can be partially related to the relatively simplistic view the aformentioned studies have on the role of VCs. Despite the large heterogeneity in the VC industry, most studies consider VCs as a homogenous group of firms and include them as dummy variables in the analysis. A better understanding is needed about how differences between VC funds lead to selecting the firms with the highest growth potential and/or realizing the potential. In this paper, we investigate the relation between VC selection and follow behaviour and portfolio company growth using a unique dataset of European VCs and 99 of their portfolio companies across Europe.

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