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January 14, 2016 Direct Flights Between VCs and Their Companies Leads to Greater Innovation The creation of new airline routes that reduce the travel time between VC firms and their portfolio companies leads to a 3.1% increase in the number of patents the portfolio company produces and a 5.8% increase in the number of citations the company’s patents receive, finds a study led by Shai Bernstein at Stanford. It also increases the probability of going public by 1.0% and the probability of having a successful exit (via IPO or acquisition) by 1.4%. From a survey, the researchers confirmed that venture capitalists are likely to spend more time at their portfolio companies if it becomes easier to get there. These results suggest that VCs don’t simply identify and invest in companies already poised to succeed; rather, when VCs spend more time with their portfolio companies, they contribute to their innovation and success. Source: The Impact of Venture Capital Monitoring

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