Geographic distance between venture capitalists and target firms and the value of quality signals

Kolympiris, Christos; Hoenen, Sebastian; Kalaitzandonakes, Nicholas

doi:10.1093/icc/dtw057

Cited by 21 publications

(22 citation statements)

References 127 publications

(166 reference statements)

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“…Inspired by the work of Hsu and Ziedonis (), Hoenen et al (), and Kolympiris, Hoenen, and Malaitzandonakes (), this paper uses the difference‐in‐difference technique to examine the signaling effect of patents. Central to this technique is the ability to divide investors into groups based on attributes that are sensitive to the signaling effect of patents.…”

Section: Hypotheses and Resultsmentioning

confidence: 99%

“…Following Kolympiris, Hoenen, and Malaitzandonakes (), we divide investors into local investors— those who reside within 80 km of a venture's headquarter—and distant investors— those who reside beyond 80 km of a venture's headquarters . According to Kolympiris, Hoenen, and Malaitzandonakes (), information asymmetry increases as distance increases. That is, distant investors know less about the ventures than local investors, and thus need to rely more on patents to make judgements about their quality.…”

Section: Hypotheses and Resultsmentioning

confidence: 99%

“…Hoenen et al () examined 1,500 U.S. biotech ventures and reported that patents do not matter after the first financing round, perhaps because investors already have sufficient information about the ventures. Most recently, Kolympiris, Hoenen, and Malaitzandonakes () used data from 586 U.S.‐based biotech ventures to conclude that the effect of patents on VC financing becomes larger as geographic distance between the VCs and the target venture increases.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Some studies have found that having patents increases the likelihood, as well as the amount, of VC financing (Hsu and Ziedonis ; Mann and Sager ; Mueller, Harhoff, and Haeussler ; Hoenen et al ; Kolympiris, Hoenen, and Malaitzandonakes ). These results have led to the conclusion that patents are signals of quality.…”

Section: Introductionmentioning

confidence: 99%

“… Kolympiris, Hoenen, and Malaitzandonakes () used geographic distance as a proxy for the degree of information asymmetry between VCs and the target ventures. Geographic distance was then used directly in the regression model.…”

mentioning

confidence: 99%

See 4 more Smart Citations

Patents and Early‐Stage Financing: Matching versus Signaling

2018

Journal of Small Business Management

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This paper investigates the role of patents on early‐stage financing. We consider two questions: are patents signals of quality and why do patents relate to venture capital (VC) financing but not angel financing? Analyzing data from 468 Canadian early‐stage ventures, we show that patents are not signals of quality. Instead, the data support a match‐on‐financing need hypothesis: ventures match with VCs, who have financial capacity to support their patent protection strategies.

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Section: Hypotheses and Resultsmentioning

confidence: 99%

Section: Hypotheses and Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

mentioning

confidence: 99%

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Patents and Early‐Stage Financing: Matching versus Signaling

2018

Journal of Small Business Management

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Dissecting entrepreneurial team research: a bibliometric analysis

2023

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Despite the massive volume of published articles, the pool of knowledge on entrepreneurial teams needs to be algorithmically classified and meticulously scrutinised. It is crucial for the field to be historically positioned under relevant themes, internally connected in terms of conceptual foundations, and systematically categorised in consonance with previously utilised frameworks of analysis. These concerns are resolved in this study by conducting a bibliometric analysis of 672 relevant articles. This form of analysis has not been previously employed on the topic of entrepreneurial teams. First, this study identifies eight main thematic clusters in the entrepreneurial teams field and their sub-themes. The eight main thematic clusters are: (i) Intellectual Capital, (ii) Cognition and Behaviour, (iii) Science and Technology, (iv) Finance, (v) Transformation, (vi) Internationalisation, (vii) Family, and (viii) Community and Surroundings. Second, the study reveals the clusters most needing restoration, relations between clusters, and input-mediator-output variables by their respective cluster. In addition, an implied scholarly depiction of entrepreneurial teams is articulated, which can serve as a basis for developing an entrepreneurial teams theory. Finally, promising avenues for future research are suggested for the entire field and every cluster specifically.

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The role of venture quality and investor reputation in the switching phenomenon to different types of venture capitalists

Croce

Ughetto

2019

J. Ind. Bus. Econ.

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We examine how the perceived quality of a venture and the reputation of the incumbent Venture Capitalist (VC) are affecting the propensity to switch from an independent VC (IVC) to another IVC, to a governmental (GVC), a bank-affiliated (BVC) and a corporate (CVC). We find that high perceived quality ventures are more likely to switch from a IVC to another IVC, for whatever level of reputation of the incumbent. The quality of the venture matters in the switching to a BVC too, when the reputation of the incumbent IVC is not particularly high. Conversely, the lower is the perceived quality of the venture and the lower is the reputation of the incumbent IVC, the higher is the likelihood to rematch with a GVC. Finally, results also suggest that the probability of successful exit increases when a switching occurs from an IVC to a new lead IVC or to a CVC.

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Geographic distance between venture capitalists and target firms and the value of quality signals

Abstract: Please refer to published version for the most recent bibliographic citation information. If a published version is known of, the repository item page linked to above, will contain details on accessing it.

Cited by 21 publications

References 127 publications

Patents and Early‐Stage Financing: Matching versus Signaling

Patents and Early‐Stage Financing: Matching versus Signaling

Dissecting entrepreneurial team research: a bibliometric analysis

The role of venture quality and investor reputation in the switching phenomenon to different types of venture capitalists

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