Internationalisation of Nordic Venture Capital Funds: Expanding Abroad From a Small Domestic Market

Niko Muttilainen & Tomas Federico Mayne

Student thesis: Master thesis


In recent years, cross-border venture capital has become increasingly prevalent in international venture markets. This has particularly been driven by the emergence of venture capital industries from small developed economies, which have until now mostly been importing investment flows. However, the internationalisation of these venture capital funds from small domestic markets has not been examined in prior research. We explore this gap in literature by analysing the internationalisation of Nordic venture capital funds using established internationalisation theories. This approach extends extant literature, which has mainly relied on institutional and agency theories to examine the influence of host-country environments on cross-border investments. We conducted eight semi-structured interviews with professionals in the Nordics, exploring internationalisation from the perspective of the venture capital fund.
Our results show compelling evidence of Nordic venture capital funds’ necessity to internationalise due to their small domestic markets. This often takes the form of follow-on investments to help existing portfolio ventures grow internationally. Furthermore, our findings suggest that domestic markets have a multidimensional impact on how venture capital funds internationalise, and thus should be more extensively considered in literature. Our study contributes to research in three meaningful ways. First, we provide an initial understanding of why and how Nordic venture capital funds internationalise. Second, we highlight the importance of considering domestic markets in the analysis of cross-border venture capital. Finally, we demonstrate the applicability of internationalisation theories to venture capital, and thus present preliminary steps towards the development of conceptual frameworks for analysing the internationalisation behaviour of venture capitalists.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2018
Number of pages193
SupervisorsBjörn Preuss