Full Citation

Title: Buy Local? The Geography of Successful and Unsuccessful Venture Capital Expansion

Citation Type: Working Paper

Publication Year: 2009

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Abstract: We document geographic concentration by both venture capital firms and venture capital-financedcompanies in three cities San Francisco, Boston, and New York. We find that firms open new satelliteoffices based on the success rate of venture capital-backed investments in an area. Geography is alsosignificantly related to outcomes. Venture capital firms based in locales that are venture capital centersoutperform, regardless of the stage of the investment. Ironically, this outperformance arises from outsizedperformance outside of the venture capital firms office locations, including in peripheral locations.If the goal of state and local policy makers is to encourage venture capital investment, outperformanceof non-local investments suggests that policy makers might want to mitigate costs associated withestablished venture capitalists investing in their geographies rather than encouraging the establishmentof new venture capital firms

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Authors: Kovner, Anna; Chen, Henry; Lerner, Josh; Gompers, Paul

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Publication Number: 15102

Institution: National Bureau of Economic Research

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Publisher Location: Cambridge, MA

Data Collections: IPUMS USA

Topics: Other

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