Venture capital investment duration

Douglas Cumming; Sofia Johan

doi:10.1111/j.1540-627X.2010.00293.x

Venture capital investment duration

Douglas Cumming, Sofia Johan

Business Management

Research output: Contribution to journal › Article › peer-review

80 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 language	English
Journal	Journal of Small Business Management
DOIs	https://doi.org/10.1111/j.1540-627X.2010.00293.x
Publication status	Published - 1 Apr 2010

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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.",

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Venture capital investment duration

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