Cross-Border Exits in Venture Capital: Evidence from the Global AI Ecosystem

Abstract

This paper investigates whether startups backed by foreign venture capital (VC) investors are more likely to achieve cross-border exits - namely, IPOs or acquisitions in the foreign investor’s home country. We argue that the effect is stronger in geographically unbounded sectors, such as Artificial Intelligence (AI), where market access and scalability transcend national borders. Using a dataset of 21,312 global VC-backed startups (deals from 2020 to 2024), we estimate a logistic regression model that incorporates investor origin, sector characteristics, and their interaction. Our findings suggest that foreign backing significantly enhances the likelihood of cross-border exits in AI, but not in more bounded industries such as healthcare, energy, or media. The results have implications for cross-border capital flows, startup strategy, and international VC syndication.