![]() 75% take seats on the board of directors in the portfolio companies, 72% help their ventures with connections to potential customers, partners, and more, and 69% of the venture capitalists provide support in exit processes. They found that two-thirds of European venture capital investors target relatively small stakes and between 10% and 20% when negotiating deals.įour out of five VCs support their portfolio companies by raising follow-on financing and providing strategic guidance. The researchers also looked into the average ownership stake venture capitalists attempt to secure with their investments. ![]() This confirms the view that VC investors select their investments based on the jockey rather than the horse.” ![]() While venture capitalists expect to earn about a 30% internal rate of return (IRR) on their investments, the average return they effectively receive is only 13% per year.īenjamin Le Pendeven, associate professor at Audencia Business School and project leader of this research project, stated: “Although venture capitalists consider technology highly important when selecting investee companies, which is expected for investors in highly innovative ventures, they primarily base their investment decisions on the management team. Interestingly, good luck is considered to contribute to successful investments by a third of venture capitalists. When asked what other factors make an investment successful, venture capital investors stated that the offering, i.e., the product, service, or technology (72%), also has a huge impact.Īfter that, timing is put forward as an important factor (56%), followed by industry conditions (43), and the business model (39%). In fact, three out of four VCs consider a competent management team the most critical driver behind investment success. ![]() The researchers found that venture capital investors view the management team’s ability as the most important factor influencing their investment decisions. The findings come from a survey of 885 venture capital investors across Europe, with the majority of the responses coming from VCs in France (20%), Germany (13%), Spain and Sweden (each 10%), Belgium (9%), and the United Kingdom (7%). ![]()
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