The dominance of later stage venture capital investments could be read as risk-averse follow-on behavior, but venture capital funds are unlikely to make later stage investments unless portfolio companies substantially fulfilled their contractual performance obligations, which preserves the signal value of the data.
Source quote, verbatim
At the same time, however, VC funds are not likely to continue with later stage investments if contractual performance obligations/thresholds of their portfolio companies were not fulfilled to a substantial degree.
From
Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016), V.2 Industries Represented, p. 36 https://ssrn.com/abstract=2808132 · source PDF
Cite as
Wulf A. Kaal, Erik P.M. Vermeulen, How to Regulate Disruptive Innovation - From Facts to Data (2016). SSRN: https://ssrn.com/abstract=2808132
Holds when
later stage venture capital investments following earlier seed investments in the same company
Classification
mechanismsupport: arguedinnovation
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