There are many factors that could impact the success of a startup. Location is definitely one of these factors, since it could greatly affect how much capital a startup has access to. Investors frequently fly in and out of different locations, and seeing that, for them, time is money, the efficiency of a nearby airport might be a deciding factor when choosing an investment.
A research done by Shai Bernstein of Stanford Graduate School of Business assistant professor; Xavier Giroud of MIT’s Sloan School of Business professor; and assistant professor Richard Townsend of Dartmouth’s Tuck School of Business, shows that during the IPO period, better airports may also result in better performance. The professors wanted to discover if the Venture Capitalists’ involvement might actually help early stage startup firms. This information will help venture capitalists especially when they are looking at potential IPOs.
The researchers observed 22,896 startups that were receiving capital from 3,158 VC firms. The findings showed that most of the venture capital activity happens outside of Northern California, New York and New England. The study results showed that more available flights could boost VCs commitment within 1-2 years. More flights can ultimately make it easier for them to travel, especially if they live far away.
Some may think that the efficiency and performance of the airports are not really important when opening up a business, especially if there are a number of investors living within their vicinity. Nonetheless, it is still one aspect that promising startups should ponder on and address.