Venture Capitalists Are More Likely to Help Startups They Can Visit Via a Direct Flight
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Venture capitalists aren’t a fan of layovers. That’s the not-too-shocking takeaway from a new study, which finds that VCs more closely monitor startups in their portfolios accessible by direct flights.
The implications, however, are important: if your startup isn’t connected to VC hotspots such as San Francisco, New York and Boston, you may miss out on crucial early guidance, .
To determine the “direct flight” effect, researchers at MIT examined around 23,000 startups and more than 3,000 venture firms over the course of 30 years. They found a small, but noticeable, difference in startups’ output once direct flights connecting them to their VC firms were introduced.
When compared to similar startups that lacked a direct route, these companies saw a 3 percent increase in granted patents. What’s more, the study found that startups connected to their VC firms via direct flight were 1.4 percent more likely to achieve a “successful exit,” i.e. an initial public offering or acquisition.
In a separate survey, the authors asked VCs if the introduction of a direct flight would increase their ability to monitor firms previously only reachable if layovers were involved. The vast majority — around 86 percent — agreed.
Related: Sesame Street Launches VC Arm to Influence Tech for Kids
Venture capitalists aren’t a fan of layovers. That’s the not-too-shocking takeaway from a new study, which finds that VCs more closely monitor startups in their portfolios accessible by direct flights.
The implications, however, are important: if your startup isn’t connected to VC hotspots such as San Francisco, New York and Boston, you may miss out on crucial early guidance, .
To determine the “direct flight” effect, researchers at MIT examined around 23,000 startups and more than 3,000 venture firms over the course of 30 years. They found a small, but noticeable, difference in startups’ output once direct flights connecting them to their VC firms were introduced.
When compared to similar startups that lacked a direct route, these companies saw a 3 percent increase in granted patents. What’s more, the study found that startups connected to their VC firms via direct flight were 1.4 percent more likely to achieve a “successful exit,” i.e. an initial public offering or acquisition.
In a separate survey, the authors asked VCs if the introduction of a direct flight would increase their ability to monitor firms previously only reachable if layovers were involved. The vast majority — around 86 percent — agreed.
Related: Sesame Street Launches VC Arm to Influence Tech for Kids
