Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93635
Authors: 
Kovner, Anna
Lerner, Josh
Year of Publication: 
2012
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 572
Abstract: 
This paper examines the investments and performance of community development venture capital (CDVC). We find substantial differences between CDVC and traditional venture capital (VC) investments: CDVC investments are far more likely to be in nonmetropolitan regions and in regions with little prior venture capital activity. Moreover, CDVC is likely to be in earlier-stage investments and in industries outside the venture capital mainstream that have lower probabilities of successful exit. Even after we control for this unattractive transaction mix, the probability of a CDVC investment being successfully exited is lower. One benefit of CDVCs may be their effect in bringing traditional VC investment to underserved regions: When we control for the presence of traditional VC investments, each additional CDVC investment results in an additional 0.06 new traditional VC fi rm in a region.
Subjects: 
community development
venture capital
JEL: 
G20
G24
G28
Document Type: 
Working Paper

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