Venture Capital

Venture Capitalists Are More Likely to Help Startups They Can Visit Via a Direct Flight

Venture Capitalists Are More Likely to Help Startups They Can Visit Via a Direct Flight
Image credit: Shutterstock
Guest Writer
2 min read
Opinions expressed by Entrepreneur contributors are their own.

Venture capitalists aren’t a fan of layovers. That’s the not-too-shocking takeaway from a new study, which finds that VCs more closely monitor startups in their portfolios accessible by direct flights.

The implications, however, are important: if your startup isn’t connected to VC hotspots such as San Francisco, New York and Boston, you may miss out on crucial early guidance, the study suggests.

To determine the “direct flight” effect, researchers at MIT examined around 23,000 startups and more than 3,000 venture firms over the course of 30 years. They found a small, but noticeable, difference in startups’ output once direct flights connecting them to their VC firms were introduced.

When compared to similar startups that lacked a direct route, these companies saw a 3 percent increase in granted patents. What’s more, the study found that startups connected to their VC firms via direct flight were 1.4 percent more likely to achieve a “successful exit,” i.e. an initial public offering or acquisition.

In a separate survey, the authors asked VCs if the introduction of a direct flight would increase their ability to monitor firms previously only reachable if layovers were involved. The vast majority -- around 86 percent -- agreed.

Related: Sesame Street Launches VC Arm to Influence Tech for Kids

More from Entrepreneur

David provides constructive insight to help businesses focus on their company growth, build brand awareness and know when and how to raise money.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Are paying too much for business insurance? Do you have critical gaps in your coverage? Trust Entrepreneur to help you find out.
Get Your Quote Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.