Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation | Zendy

Michael Fritsch | Zendy; Dirk Schilder | Zendy

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Does Venture Capital Investment Really Require Spatial Proximity? An Empirical Investigation

Author(s) -

Michael Fritsch,

Dirk Schilder

Publication year - 2008

Publication title -

environment and planning a economy and space

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.74

H-Index - 129

eISSN - 1472-3409

pISSN - 0308-518X

DOI - 10.1068/a39353

Subject(s) - venture capital , portfolio , syndicate , investment (military) , business , capital (architecture) , social venture capital , portfolio investment , affect (linguistics) , finance , economic geography , economics , geography , linguistics , philosophy , archaeology , politics , political science , law

We examine the role of spatial proximity for venture capital (VC) investments in Germany. The main database is a survey of seventy-five personal interviews with representatives of different types of financial institutions. The analysis shows that spatial proximity is much less important for VC investments than is often believed. The results indicate that telecommunication cannot be regarded as a means of overcoming the problems of geographical distance. We find that VC suppliers frequently syndicate investments in distant portfolio firms with partners who are more closely located. The age of the portfolio firm does not affect the importance of spatial proximity. On the whole, regional proximity is not a dominant factor in VC partnerships.

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