【正文】 cteristic across these AsiaPacific countries is that their venture capital markets are not well developed, particularly relative to the US. The data were collected from unsolicited and solicited confidential information memorandum sent by AsiaPacific VCs to an international fundoffunds manager。s equity market in order to understand the relationship between the VC39。 (2) acquisitions (or ‘trade sales’)—the pany is purchased by a larger firm, typically a strategic acquiror, and both the venture capitalist and entrepreneurs sell their interest in the pany。 IPO。 investments in USbased entrepreneurial firms. The data indicate IPOs are more likely in countries with a higher Legality index. This core result is robust to controls for countryspecific stock market capitalization, MSCI market conditions, venture capitalist fund manager skill and fund characteristics, and entrepreneurial firm and transaction characteristics. Although Black and Gilson (1998) [Black, ., Gilson, ., 1998. Venture capital and the structure of capital markets: banks versus stock markets. Journal of Financial Economics 47, 243–77] speculate on a central connection between active stock markets and active venture capital markets, our data in fact indicate the quality of a country39。 venture capitalists39。 exits 。 rather, returns are derived from capital gains upon exit. In fact, a venture capitalist’s decision to invest typically depends on exit potential. Where laws impact exit, they also impact the decision to invest and therefore the entire development of a venture capital market. Prior work has not considered private equity exits in more than one or two countries simultaneously, and hence has been unable to fully address the question of how Legality impacts private equity markets. . Legality and venture capital exits There are five principal venture capital exit vehicles (see, ., Black and Gilson, 1998, and Cumming and MacIntosh, 2021a and Cumming and MacIntosh, 2021b, for discussion): (1) initial public offerings (IPOs)—the entrepreneurial firm is listed on a stock exchange for the first time。 and (5) writeoffs (or ‘liquidation’)—the investors ‘walk away’ from the investment with little or no return. In this paper we introduce the term ‘private exit’ to refer to the group of acquisitions, secondary sales and buybacks. In some instances in this dataset, we are able to observe when there has been a private exit, but not the specific type of private exit. . Economic and governance factors affecting venture capital exits In addition to country legal factors, a variety of other variables may influence the exit oute of a VC backed pany, including market conditions and market capitalization, VC fund and entrepreneur characteristics, and transactionspecific characteristics. We briefly discuss each in turn in this subsection. Two important types of market variables can affect exit outes of VCbacked panies. First, it is well known that favorable stock market returns and bubble periods increase the probability of IPO outes, and therefore we control for countryspecific MSCI indices, as well as the Inter bubble in our sample. Second, the countryspecific stock market capitalization can increase the probability of IPO Black and Gilson (1998) argue that the development of the public equity market permits VCs to exit through an IPO, which itself is critical to the development of the venture capital market. Thus, it is reasonable to assume that the development of the public equity market is linked to the choice of the exit process for venture capitalists. At the same time, La Porta et al., 1997 and La Porta et al., 1998 document countries with better legal protection of shareholder rights