Who are the active investors?☆Evidence from venture capital

Laura Bottazzi; M DARIN; Thomas Hellmann

doi:10.1016/j.jfineco.2007.09.003

Journal of Financial Economics Vol. 89 No. 3 2008

Who are the active investors?☆Evidence from venture capital

Laura Bottazzi^1,2; M DARIN^3,4,1; Thomas Hellmann⁵

¹ Bocconi University · ² University of Bologna · ³ Tilburg University · ⁴ European Corporate Governance Institute · ⁵ University of British Columbia

open access

Abstract

This paper examines the determinants and consequences of investor activism in venture capital. Using a hand-collected sample of European venture capital deals, it shows the importance of human capital. Venture capital firms with partners that have prior business experience are more active recruiting managers and directors, helping with fundraising, and interacting more frequently with their portfolio companies. Independent venture capital firms are also more active than ‘captive’ (bank-, corporate-, or government-owned) firms. After controlling for endogeneity, investor activism is shown to be positively related to the success of portfolio companies.

DOI: 10.1016/j.jfineco.2007.09.003
Volume: 89
Issue: 3
Pages: 488-512
Language: en
Sources: crossref bibtex:phds-export.bib openalex

Who are the active investors?☆Evidence from venture capital

Abstract

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