We examine the effect of overconfidence bias on VC firms’ investment. Using a sample of U.S. venture capital exits by IPOs and M&As between 2000 and 2019, we construct an overconfidence index and find a strong positive relationship between the follow-on funds and the degree of overconfidence. We also find that the higher the VC’s overconfidence, the shorter the time to raise new capital. Further, we show that overconfident VCs are more likely to exit their investments via IPOs rather than M&As and that the degree of overconfidence negatively and significantly affects the time to exit.

中文翻译：

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过度自信会影响风险投资公司的投资吗？

我们研究了过度自信偏差对风险投资公司投资的影响。我们利用 2000 年至 2019 年间美国风险投资通过 IPO 和并购退出的样本，构建了过度自信指数，发现后续资金与过度自信程度之间存在很强的正相关关系。我们还发现，风险投资的过度自信程度越高，筹集新资金的时间就越短。此外，我们还发现，过度自信的风险投资公司更有可能通过 IPO 而不是并购退出投资，而且过度自信的程度会对退出时间产生显着的负面影响。