Get access

Corporate Relocation in Venture Capital Finance

Authors

  • Douglas Cumming,

    Corresponding author
    1. York University—Schulich School of Business, Toronto, Ontario, Canada
      Douglas Cumming, tel.: +416-736-2100 ext. 77942; e-mail: Douglas.Cumming@gmail.com.
    Search for more papers by this author
  • Grant Fleming,

    1. Wilshire Private Markets Group, P.O. Box 330, Australia; and School of Finance and Applied Statistics, Australian National University, Canberra, Australia.
    Search for more papers by this author
  • Armin Schwienbacher

    1. LSM Université Catholique de Louvain, Louvain School of Management, Louvain-la-Neuve, Belgium; and University of Amsterdam, The Netherlands.
    Search for more papers by this author

Douglas Cumming, tel.: +416-736-2100 ext. 77942; e-mail: Douglas.Cumming@gmail.com.

Abstract

This paper introduces an analysis of international relocation decisions of venture capital (VC)-backed companies. Relocations to the United States are motivated by economic conditions as well as an improvement in the laws of the country in which the entrepreneurial firm is based. Relocations to the United States yield much greater returns to Asia-Pacific VCs than investing in companies already based in the United States at the time of VC investment. Further, more experienced Asia-Pacific VCs have greater success with their investee relocations to the United States, and these relocations yield higher returns relative to staying in their country of origin.

Get access to the full text of this article

Ancillary