Venture Capitalists Are More Likely to Help Startups They Can Visit Via a Direct Flight If you want more guidance for your company, it helps to be easily accessible.
By Laura Entis •
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.
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