Venture Capitalists’ Experience and Foreign IPOs: Evidence from China

Abstract

Integrating signaling theory with social network theory, we investigate the influence of venture capitalists’ (VCs’) IPO experience on the likelihood of foreign IPO successes. Using data from VC–backed Chinese companies listed on the U.S. or Chinese stock markets from 2002 to 2012, we find that U.S. VCs’ experience in either market increases the chance of listing in the United States. However, Chinese VCs’ experience in the United States plays the same role, but not in China. For entrepreneurs who desire to pursue opportunities in international capital markets, the novel findings offer important implications in their VC selection decisions.