Do venture capitalists' characteristics affect the performance of the firms they back?

Previous research has already addressed the issue of the impact of venture capital (VC) backing on the growth patterns of investee firms. Based on qualitative, hand-collected data, other studies analyzed the different tasks performed by venture capitalists (VCs) to add value to their portfolio companies. The aim of this paper is to provide evidence of the effect of some VCs' characteristics on the performance of the portfolio firms over time. The findings are based on panel data of quantitative variables on a highly representative sample of VC investments in Continental Europe. This approach allows us to keep track of the changes over time and to control for the effect of the money invested and the value added by VCs separately. Our findings show that value added is significant in companies at the expansion stage for some VCs characteristics, such as age, size or number of portfolio companies per investment manager, whereas performance on start-up companies seems related to funding alone.