ABSTRACT
This chapter includes a comprehensive summary of the existing literature on the structural, operational and wider environmental factors that can impact on venture capital fund performance. Structural factors include the size, stage, sector and geographical focus of VC funds, the backgrounds of investment executives, their responsibility for deals and the use of venture partners and advisory boards. Operational factors include the risk approach to investing, identifying themes for investing including disruption, sourcing of deals, due diligence and investment approval, investment terms, syndication, monitoring and adding value and exiting from deals. Wider environmental factors include culture, fragmentation of markets, capital inflow, technology ecosystems and even luck. The latter part of the chapter includes an analysis of the relatively few existing studies that have specifically considered explanations for the difference in performance between European and US VC funds, which is the focus of the current research.
