Learning from own and others' previous experience : the contribution of the venture capital firm to the likelihood of a portfolio company's trade sale

B. Clarysse, A.S.A. Bobelyn, I. del Palacio Aguirre

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14 Citations (Scopus)
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Abstract

The objective of this paper is to examine to what extent different venture capital firms contribute to the likelihood that the portfolio company in which they invested will realize a trade sale. We use arguments from learning theory to hypothesize the relationship between vicarious, experiential and congenital learning of the venture capital (VC) firm and the trade sale hazard of its portfolio companies. Based on our analysis of 206 VC-backed UK start-ups, we find that both trade sale experience of the VC and learning from syndicate partners with trade sale experience significantly increase the trade sale hazard. The routines and procedures learned from experienced syndicate partners complement experience accumulated through trial and error. Congenital trade sale experience of the investment managers on the contrary has no significant influence on the acquisition hazard.
Original languageEnglish
Pages (from-to)575-590
Number of pages16
JournalSmall Business Economics
Volume40
Issue number3, SI
DOIs
Publication statusPublished - 1 Apr 2013
Externally publishedYes

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