Refine
Year of publication
- 2022 (1)
Document Type
- Working Paper (1) (remove)
Language
- English (1) (remove)
Has Fulltext
- yes (1)
Is part of the Bibliography
- no (1) (remove)
Keywords
- Fund family (1) (remove)
Institute
Venture capital (VC) funds backed by large multi-fund families tend to perform substantially better due to cross-fund cash flows (CFCFs), a liquidity support mechanism provided by matching distributions and capital calls within a VC fund family. The dynamics of this mechanism coincide with the sensitivity of different stage projects owing to market liquidity conditions. We find that the early-stage funds demand relatively more intra-family CFCFs than later-stage funds during liquidity stress periods. We show that the liquidity improvement based on the timing of CFCF allocation reflects how fund families arrange internal liquidity provision and explains a large part of their outperformance.