Time to IPO: Role of heterogeneous venture capital∗

Venture Capital (VC) is often syndicated to invest. The characteristics of each syndicate can vary not only in the number of VC but also in the heterogeneity of VC types included in a syndicate (e.g., bank-dependent, independent, and public etc.). This paper empirically studies how these two characteristics are related to the dynamics of client firms ’ Initial Public Offerings (IPOs). We test whether the IPOs of VC-backed entrepreneurial firms tend to be achieved in shorter periods when financed by many and/or heterogeneous VC. The results of our hazard estimation show that the hazard ratio of IPOs increases not only when the number of VC sources in a syndicate increases but also when the VC become more heterogeneous. The latter result implies the existence of the complementarity among heterogeneous VC in the process of screening and managerial value added. We also confirm that such positive impact of heterogeneous VC becomes more sizable in the absence of bank-dependent VC. This implies that complementarity among VC arises when the uncertainty about venture firms, which coul