Venture Capitals’ Background And Performance

This thesis examines the impact of venture capital firms’ background on theperformance of both VC investments and VC-backed enterprises. Local VCs andforeign VCs differ in their investment strategies and investment performance. LocalVCs outperform foreign VCs in terms of successful exit. Also, local VCs prefer to exitthrough IPO, especially IPO on domestic stock exchanges. Above findings are inexistence when studying at both the VC investment level and the VC-backedenterprise level. The impact of government background is insignificant. Localgovernment VCs and local private VCs are similar in their investment strategies andinvestment performance. However, by syndicating with local private VCs, localgovernments VCs improve their performance significantly. There are two maininnovations in this thesis. First, I study VC performance from a totally new viewpointby considering the impact of VCs’ background. Second, this is an empirical thesis,which is rare in existing domestic studies.