Venture capital investment duration

Douglas Cumming, Sofia Johan

Research output: Contribution to journalArticle

51 Citations (Scopus)

Abstract

This paper examines cross‐country evidence on the duration of venture capital (VC) investment. We formulate a theory of VC investment duration based on the idea that venture capitalists exit when the expected marginal cost of maintaining the investment is greater than the expected marginal benefit, and thereby relate VC investment duration to entrepreneurial firm characteristics, investor characteristics, deal characteristics, and institutional and market conditions. VC investment duration data in Canada and the United States lend strong support to the theoretical predictions developed herein.
Original languageEnglish
JournalJournal of Small Business Management
DOIs
Publication statusPublished - 1 Apr 2010

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