An Empirical Analysis of Venture Capital Exits in Europe and the United States

EFA 2002 Berlin Meetings Discussion Paper

40 Pages Posted: 19 Mar 2002

Date Written: January 2005


This paper focuses on exits by venture capitalists from their portfolio companies. Using a unique self-collected data set, we provide new stylized facts about the venture capital industry in Europe and in the US. Although there are numerous similarities between the US and Europe, there are also important differences, in particular with respect to the duration of exit stage, the use of convertible securities, the replacement of former management and deal syndication. Much of these differences can be brought to a common denominator, namely that European venture capitalists face a less liquid market for the human resources that go into the ventures as well as for the exit opportunities. The most striking difference is with respect to the use of convertible securities, which are by far less often used in Europe as compared to the US. Overall, we show that European venture capitalists monitor less. Finally, the paper analyzes the impact of venture capital firms' characteristics and the use of different monitoring devices (stage financing, board representation, use of convertible securities and reporting of activities) on the exit route. Some aspects of close monitoring seem to significantly affect the venture's likelihood of going public.

Keywords: venture capital, exit, convertible securities, IPO, syndication, start-up

JEL Classification: F36, G15, G24, G32, G34

Suggested Citation

Schwienbacher, Armin, An Empirical Analysis of Venture Capital Exits in Europe and the United States (January 2005). EFA 2002 Berlin Meetings Discussion Paper, Available at SSRN: or

Armin Schwienbacher (Contact Author)

SKEMA Business School ( email )

Avenue Willy Brandt
Euralille, 59777


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