<p>Using project level venture capital (VC) data combined with high-speed rail (HSR) connection information for Chinese cities, this paper studies whether and how infrastructural upgrading affects financial efficiency. To begin with, we find that direct HSR connection is associated with higher quantity of VC investment and the pattern is robust to various tests. More importantly, we discover the following two patterns that help shed light on the selection and monitoring mechanisms through which HSR connection promotes VC investment: first, HSR connection leads to a broader industry coverage, and the positive effects are stronger for industries and projects that have more reliance on soft information (namely non-codified information). These results are consistent with the importance of soft information in VC investment and HSR’s role in improving the efficiency of VC projects by lowering the cost of acquiring and verifying such information. Second, HSR connection is associated with higher average investment amount per project and higher success rates for projects backed by VC firms with stronger monitoring capabilities. These results provide evidence that more post-investment management participation has been facilitated by improved HSR accessibility, thus supporting project monitoring as an important mechanism in boosting VC investment, in addition to project selection. Furthermore, heterogeneity analyses reveal the importance of financial development and foreign investment in boosting HSR’s positive effects. Finally, we find no evidence that increased VC investment in HSR-connected cities crowds out investment in other regions, thus highlighting infrastructural improvement’s net gains in economic outcomes.</p>