Short and Long-term Interactions between Venture Capital Returns and the Macroeconomy : Evidence for the United States

Based on theoretical rationales of an equilibrium model, we use macroeconomic and financial variables as proxies to empirically model their influence on the performance of risk capital in the U.S. The results show that venture capital investments are positively related to industrial production, the exit channel Nasdaq, and the long-term interest rate, but negatively related to the short-term interest rate. According to the short-term dynamics, VEC Granger causality confirms that industrial production and the exit channel influence venture capital performance, while in the latter, venture capital Granger causes Nasdaq performance. However, in comparison to Nasdaq stock prices, venture capital prices are less exogenous