This study focuses on the long-term performance of new venture capital financed firms. Despite numerous studies on the value adding activities of VCs, few have actually managed to empirically confirm if and how VCs involvement in new firms actually has a positive effect on business performances, and especially on long-term firm performance. One can wonder whether the performance of VC financed new firms is an effect of skilled selection (picking winners) or good post investment management by the VCs?

The basic premise of “picking “ is that it is possible for VCs to recognize the “best” new firms by looking at the initial firm configuration, and by this, select the most promising ones. As such, we could expect that (H1) the firm configuration at the time of VC initial funding have a long-term effect on its performance. Rather than just picking winners, VCs can form winners by taking an active governance role in the invested firms through active participation on the board of directors, acting as a sounding board, and monitoring financial performance. As such, we could also expect that (H2) VC involvement in a new firm during the investment period has effects on the long-term performance of a new firm.