Does family matter? Venture capital cross-fund cash flows

Roman Kräussl, Kalle Rinne and Huizhu Sunc

No 695, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: Venture capital (VC) funds backed by large multi-fund families tend to perform substantially better due to cross-fund cash flows (CFCFs), a liquidity support mechanism provided by matching distributions and capital calls within a VC fund family. The dynamics of this mechanism coincide with the sensitivity of different stage projects owing to market liquidity conditions. We find that the early-stage funds demand relatively more intra-family CFCFs than later-stage funds during liquidity stress periods. We show that the liquidity improvement based on the timing of CFCF allocation reflects how fund families arrange internal liquidity provision and explains a large part of their outperformance.

Keywords: Venture capital; Fund family; Subsidization; Liquidity; Performance (search for similar items in EconPapers)
JEL-codes: G23 G24 G34 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-cfn and nep-pay
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/268897/1/1837927324.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:695

Access Statistics for this paper

More papers in CFS Working Paper Series from Center for Financial Studies (CFS) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().