The Determinants of Venture Capital Portfolio Size: Empirical Evidence

Abstract

This paper explores factors that affect portfolio sizeamong a sample of venture capital financing data from 214 Canadian funds. Fourcategories of factors affect portfolio size: (1) the venture capital funds'characteristics, including the type of fund, fund duration, fund-raising, andthe number of venture capital fund managers; (2) the entrepreneurial firms'characteristics, including stage of development, technology, and geographiclocation; (3) the nature of the financing transactions, including staging,syndication, and capital structure; and (4) market conditions. The data furtherindicate decreasing returns to scale in the number of entrepreneurial firmsfinanced by a venture capital fund. (Publication abstract)

Keywords: Business conditions, Business assistance programs, Private financing, Corporate ventures, Venture capital, Firm financing, Venture capital portfolios, Firm characteristics