Abstract

The US VC industry is admired throughout the world as an engine of national economic growth positively influencing entrepreneurial activity, employment growth and the fostering of innovative climates. Accordingly, the US has become an exemplar as to how government policy makers would wish their national VC industry to evolve. However, trans-Atlantic attempts to emulate the successful East/West coast model remain problematic. US VC funds continue to significantly outperform their European equivalents as early-stage and value added investors. Both the reasons for this performance discrepancy and the means by which it may be resolved remain important research and policy questions. Institutional and environmental factors influencing governmental efforts in developing a functioning VC market have already been evaluated by several researchers. This paper, however, takes a micro-economic perspective focusing specifically on VC firm related factors that have shown to be important determinants of investment performance.

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