Date of Award

2026

Document Type

Honors Thesis (Open Access)

Department

Colby College. Economics Dept.

Advisor(s)

Yang Fan

Second Advisor

Linwood Downs

Abstract

This project investigates how the prestige of VC firms investing in early-stage startups affects the likelihood of successful exits, defined as IPOs or acquisitions. Using Crunchbase data on companies, funding rounds, and investments, I construct six measures of prior VC success to proxy for prestige. Contrary to conventional expectations, VC prestige is not associated with increased exit probability, a finding robust to composite, LASSO-selected, and PCA-based indices. Further analysis suggests this relationship is driven by mechanisms through which high VC prestige paired with large syndicates and high funding may create frictions, while prestigious VCs help smaller companies grow more effectively.

Keywords

Venture Capital, Venture Capital Prestige, Startup Exit Outcomes, Venture-Backed Startups

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