Venture Capital Timing and Firm Valuation: Evidence from Scandinavian Ventures

Abstract

This study investigates how the timing of the initial venture capital (VC) investment affects the performance of startup firms. The research is conducted using data from 97 Scandinavian VC backed companies that went public between 2005 and 2021. Using Ordinary Least Squares (OLS) regressions with Tobin’s Q as the performance metric, we find evidence that investments made during the earlier stages of a firm’s life cycle are associated with higher performance at the time of IPO. This positive effect persists three years post-IPO, although with reduced magnitude and statistical significance. The findings remain robust across alternative model specifications. Overall, our research contributes to the literature on venture capital by highlighting the performance implications of investment timing in a Scandinavian context.