Do venture capitalists succeed outside their comfort zone? : an empirical study of venture capital firms' performance as they move into new nations or industries
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- Master Thesis 
This thesis aims to analyze the performance of venture capitalists (VCs) at the moment they invest in new nations or industries. Our sample consists of 29,172 venture capital back ed entrepreneurial firms from 43 different nations in the 20 - year period from 1989 through 2008. We use entrepreneurial firm exit by IPO or M&A as our metric for success . We find that entrepreneurial firms backed by syndicates of VCs investing in their industry for the first time are less likely to have a successful exit. However, these results turn out to be insignificant when including year - fixed effects. When looking a t s yndicates of VCs who invest in nation s for the first time we do not find any significant evidence that they perform better or worse than other VCs. We also look at the performance of VCs who invest marginally in foreign nations or invest in industries t hat are outside their industry preference. We do no t find any significant evidence that VC s who invest marginally in foreign nations perform better or worse than other VCs . However, we do find some significant results indicating that entrepreneurial firms backed by VCs investing outside their preferred industry are less l ikely to have a successful exit.