Investment firm characteristics in venture capital

Abstract

The private equity market is known for its lack of liquidity and information. This thesis aims at bringing further clarity to the private equity field, specifically targeting the relationship between firm size and risk in the Nordic market. The amount of previous research in this area is scarce and consists mainly out of more general topics and a broader field. Using a sample of 2,919 observations we try to predict which variables affect firm size. Based on the model, we conclude that larger firms may take larger risk, primarily through being part of earlier investment rounds. Furthermore, our results imply that larger firms to a greater extent invest in follow-up rounds and invest internationally.