A1207
Title: Reconsidering success in staged venture investments - The role of follow-on investment in investor lifecycles
Authors: Eugene Hong - Keio University (Japan) [presenting]
Hiroshi Takahashi - Keio University (Japan)
Abstract: The purpose is to suggest a different perspective on the success of staged venture investments for investors. Previous studies have primarily considered exit events, such as IPOs and M\&A, as the measure of success in venture investments. On the other hand, the success of venture investment should not be limited to the event of converting invested capital into multiplied cash as a one-time occurrence. Throughout the investor's lifetime of investing activities, it is considered that the firm's successful serial fundraising can be an essential event that determines the sustained success of the firm's investors. From this perspective, it is examined how an investor's participation in a follow-on investment in the portfolio company affects the likelihood of their long-term success across the lifetime investment activities. Furthermore, methods for predicting the macroscopic success of venture investments are proposed using machine learning techniques, trained on both the investors' past investment history data and the firms' fundraising records.
