Title: Value-add and portfolio construction strategies in venture capital: a case study approach on investor perceptions

Authors: Elisabetta Sakiotis; Axel Buchner

Addresses: Finance Department, ESCP Business School – Berlin Campus, Heubnerweg 8-10, 14059, Berlin, Germany ' Finance Department, ESCP Business School – Berlin Campus, Heubnerweg 8-10, 14059, Berlin, Germany

Abstract: VCs invest in high-performing entrepreneurial firms with the aim of generating high returns. Value-add and portfolio construction are two strategic levers that investors can use to differentiate themselves in an increasingly competitive environment. This paper adopts a case study approach and interviews ten prominent European investors from Western Europe. Its findings are that: 1) value-add is a main preoccupation of VCs where human capital, interpersonal relationships, and monitoring matter; 2) portfolio construction varies and is influenced by considerations of diversification, syndication and exits. This paper contributes to the literature by providing a synthesised understanding of VC activities in a more mature and competitive European start-up ecosystem.

Keywords: venture capital; VC; value-add; portfolio construction; competition Europe.

DOI: 10.1504/IJEV.2024.138253

International Journal of Entrepreneurial Venturing, 2024 Vol.16 No.1, pp.31 - 68

Received: 25 May 2023
Accepted: 12 Nov 2023
Published online: 30 Apr 2024 *

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