Venture Capital Exits in Emerging Markets

We analyze a sample of 336 venture capital exits from 12 Asia -Pacific countries: Australia, China, Hong Kong, India, Indonesia, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand. The data also comprise these countries’ venture capitalists’ investments in U.S.-based entrepreneurial firms. We consider the determinants of the types of entrepreneurial firms receiving venture capital finance, the choice of exit vehicle (IPO, acquisition, secondary sale, buyback and write -off), the extent of exit (full or partial), and the determinants of the IRRs with Heckman controls for selection effects. Among other things, the data highlight the importance of legal and institutional factors in the disposition of venture capital investments. * Cumming is Assistant Professor of Finance, Economics & Law at the University of Alberta School of Business, and Visiting Assistant Professor of Finance at the University of Amsterdam Graduate School of Business (2002, 2003); Fleming is Senior Lecturer, Australian National University, Australia and Vice -President, Wilshire Australia Pty Ltd. We owe special thanks to Wilshire Associates, Inc. for providing the data for this paper and to Kate Humphreys and Corrine Sellars for research assistance. Douglas Cumming has benefited from working with Jeffrey MacIntosh on related research. The views expressed in this paper do not represent those of Wilshire Australia Pty Ltd and Wilshire Associates, Inc.