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The Determinants of Venture Capital Portfolio Size: Empirical Evidence

Douglas J. Cumming
The Journal of Business
Vol. 79, No. 3 (May 2006), pp. 1083-1126
DOI: 10.1086/500670
Stable URL:
Page Count: 44
Subjects: Business Finance
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The Determinants of Venture Capital Portfolio Size: Empirical Evidence
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This paper explores factors that affect portfolio size among a sample of venture capital financing data from 214 Canadian funds. Four categories of factors affect portfolio size: (1) the venture capital funds’ characteristics, including the type of fund, fund duration, fund‐raising, and the number of venture capital fund managers; (2) the entrepreneurial firms’ characteristics, including stage of development, technology, and geographic location; (3) the nature of the financing transactions, including staging, syndication, and capital structure; and (4) market conditions. The data further indicate decreasing returns to scale in the number of entrepreneurial firms financed by a venture capital fund.

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