VC investments and global exits

Espenlaub, Susanne, Khurshed, Arif and Mohamed, Abdulkadir (2015) VC investments and global exits. EUROPEAN JOURNAL OF FINANCE, 21 (7). pp. 608-628.

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Official URL: http://dx.doi.org/10.1080/1351847x.2013.871736

Abstract

This paper examines exits of UK venture capital backers (VCs) from portfolio companies around the world. Mergers and acquisitions (M&A) are the most frequently used exit route for all investments, both in the UK and abroad. Exit through M&A is particularly common for investments in the UK while the probability of an exit through an initial public offering (IPO) is substantially lower for investments made in the UK than abroad. We are able to explain these country differences in terms of variations in the characteristics of VCs, portfolio companies, legal systems and market conditions. Portfolio companies backed by experienced VCs have high probabilities of exits through M&A or IPO. A successful exit is more likely when a VC syndicate includes an experienced member. The likelihood of a successful exit through M&A, IPO or management buyouts is high in countries with, and at times of, high stock market liquidity. Legal systems that provide more investor protection facilitate exits through IPO or M&A.

Item Type:	Article
Uncontrolled Keywords:	M&A exit, legal system, VC investments, syndicates, IPO exit, market liquidity
Depositing User:	Symplectic Admin
Date Deposited:	23 Dec 2014 16:32
Last Modified:	15 Dec 2022 21:32
DOI:	10.1080/1351847X.2013.871736
Related URLs:	Author Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/2004021