If you want to land a check from venture capitalists, the old cliché goes, set up shop within an hour’s drive of their offices.
That rule might not apply anymore, but a study co-authored by an MIT professor indicates it’s still a good idea to be one plane-ride away.
The research, which looked at nearly 23,000 startups and more than 3,000 venture capital firms, tried to measure whether startups performed better after a new direct flight gave them quicker access to their existing investors.
The authors, including MIT finance professor Xavier Giroud, said there was a noticeable change in one measure of innovation: more patents.
Startups that were connected to their investors’ cities by a new direct flight were granted about 3 percent more patents, and those patents were cited 5.8 percent more often, when compared to similar pairs of cities not linked by a single flight.
Startups with direct flight links to their VCs also were 1.4 percent more likely to either reach an IPO or sell their company in an acquisition, the study found.
The paper is being published in an upcoming edition of the Journal of Finance.
The researchers — Giroud, Stanford professor Shai Bernstein, and Dartmouth’s Richard R. Townsend — said they also tried to control for the effect of regional economic growth, discounting the possibility that startup success and more direct flights were just ripple effects of a local economic boom.
One big takeaway, Giroud said, was that promoting entrepreneurship might mean lobbying for more direct flights that can bring VC cash to town.