Venture capital: The effect of local and global social ties on firm performance

Firm financing literature has been dominated by a relatively undersocialized' and aspatial' view. We approach this gap by applying a social capital and economic geography informed lens to financial transactions. We explore if and how the early growth performance of venture capital backed organizations varies with the structural and physical location of their investors in syndication networks. Drawing on longitudinal data of Belgian firms and their venture capital investors, it is demonstrated that inter-firm relational ties and, especially cross-border linkages expand organizational outcome. In that, we show that not only social relations shape financial activity, but that also spatial patterns of co-investment networks deserve notice.