Review of Financial Studies 2026

Learning by Investing: Entrepreneurial Spillovers from Venture Capital

Josh Lerner¹; Jinlin Li²; Tong Liu³

¹ Harvard University and National Bureau of Economic Research · ² China Institute of Finance and Capital Markets , China Securities Regulatory Commission, · ³ MIT Sloan School of Management

Abstract

This paper studies how investing in venture capital (VC) affects the entrepreneurial outcomes of individual limited partners (LPs). Using comprehensive administrative data on entrepreneurial activities and VC fundraising and investments in China, we find that after investing in a successfully launched VC fund, individual LPs create significantly more ventures than do LPs in funds that failed to launch. These new ventures tend to be high-tech firms with better employment outcomes and more patent activity. Our results suggest that venture investments are a channel through which individual LPs learn.

DOI

10.1093/rfs/hhag069

Language

en

Sources

crossref

Cite

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