Contributions

  • Harvard Business School - Contributor

Publication

2009 - Harvard Business School, Boston, Massachusetts

Language

English

Word Count

10,250 words, Guess

Page Count

41 pages

Identifiers

Description

We document geographic concentration by both venture capital firms and venture capital-financed companies in three cities - San Francisco, Boston, and New York. We find that firms open new satellite offices based on the success rate of venture capital-backed investments in an area. Geography is also significantly related to outcomes. Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment. Ironically, this outperformance arises from outsized performance outside of the venture capital firms' office locations, including in peripheral locations. Outperformance of non-local investments suggests that policy makers in regions without local venture capitalists might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture capital firms.

Subjects

Series Statement

  • Working paper / Harvard Business School -- 09-143

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