Building relationships early: Banks in venture capital

Thomas Hellmann, Laura Lindsey, Manju Puri

Research output: Contribution to journalArticlepeer-review

194 Scopus citations


This paper examines bank behavior in venture capital. It considers the relation between a bank's venture capital investments and its subsequent lending, which can be thought of as intertemporal cross-selling. Theory suggests that unlike independent venture capital firms, banks may be strategic investors who seek complementarities between venture capital and lending activities. We find evidence that banks use venture capital investments to build lending relationships. Having a prior relationship with a company in the venture capital market increases a bank's chance of subsequently granting a loan to that company. Companies can benefit from these relationships through more favorable loan pricing.

Original languageEnglish (US)
Pages (from-to)513-541
Number of pages29
JournalReview of Financial Studies
Issue number2
StatePublished - Apr 2008

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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