The Impact of Venture Capital on Innovation: Beyond Portfolio Companies

Juanita Gonzalez-Uribe; Robyn Klingler-Vidra

The Impact of Venture Capital on Innovation: Beyond Portfolio Companies

Juanita Gonzalez-Uribe^*, Robyn Klingler-Vidra

^*Corresponding author for this work

LSE London School of Economics & Political Science

Research output: Chapter in Book/Report/Conference proceeding › Chapter

Abstract

The thrust of research on the relationship between venture capital and innovation focuses on venture capitalists’ ability to pick winners and add value to their portfolio companies (i.e., the companies in which they invest). This entry expands the scope of research on the economic contribution of venture capital by reviewing emerging studies on how the due diligence process that venture capitalists conduct adds value to a wider set of companies; the approximately 30 out of 100 they consider for investment, rather than the 1 out of 100 in which they ultimately invest. Initial findings offer a rough estimate that due diligence value-add to nonportfolio companies can be as large as half of its investment value-add to portfolio companies.

Original language	English
Title of host publication	The Palgrave Encyclopedia of Private Equity
Publisher	Palgrave
Publication status	Published - 24 Jun 2023

Keywords

Venture Capital
business growth
Entrepreneurship
INNOVATION
PRIVATE EQUITY
Due diligence

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

https://link.springer.com/referenceworkentry/10.1007/978-3-030-38738-9_30-1

Cite this

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AB - The thrust of research on the relationship between venture capital and innovation focuses on venture capitalists’ ability to pick winners and add value to their portfolio companies (i.e., the companies in which they invest). This entry expands the scope of research on the economic contribution of venture capital by reviewing emerging studies on how the due diligence process that venture capitalists conduct adds value to a wider set of companies; the approximately 30 out of 100 they consider for investment, rather than the 1 out of 100 in which they ultimately invest. Initial findings offer a rough estimate that due diligence value-add to nonportfolio companies can be as large as half of its investment value-add to portfolio companies.

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ER -

The Impact of Venture Capital on Innovation: Beyond Portfolio Companies

Abstract

Keywords

UN SDGs

Access to Document

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Cite this