Duration analysis of venture capital staging: A real options perspective

This study takes a real options perspective towards venture capital staging and views the staging decision as a choice between holding the current option to invest and investing now to obtain the option to invest subsequently. It proposes that this staging decision depends on the factors that influence the value of these two options, such as competition and various sources of uncertainty. The empirical results suggest that market uncertainty encourages venture capital firms to delay investing at each round of financing, whereas competition, project-specific uncertainty and agency concerns prompt venture capital firms to invest sooner. This study has useful implications for theory and practice.     

Industry relatedness in trade sales and venture capital investment returns

We investigate relationships between the industry relatedness of venture capital-backed companies and their strategic acquirer in trade sales and the achieved investment returns of venture capitalists. Using a proprietary data set of 716 trade sales, we analyze return differences between lateral and synergetic trade sales, as well as between horizontal and vertical trade sales. We find that venture capitalists achieve higher returns with lateral rather than synergetic trade sales, and that the difference is greater for deals involving early stage companies characterized by strong information asymmetries. In addition, horizontal trade sales yield higher returns than vertical trade sales; however, in boom phases of the venture capital market, this effect reverses. Finally, we find that experienced venture capitalists are able to overcome disadvantageous situations in trade sales, resulting in comparable returns across all trade sale categories.     

基于实物期权的企业项目投资时机选择分析

文章简述了实物期权理论,并构造了利用实物期权中的延迟投资期权进行投资时机选择的步骤,以期对企业项目投资决策起一定的指导作用。     

The interplay of need and opportunity in venture capital investment syndication

This study examines the syndication of investments novel to a VC firm as a function of the firm's need and opportunity to do so. We distinguish two types of uncertainty that firms face when considering novel investments: egocentric, pertaining to making the right decisions, and altercentric, pertaining to being evaluated as a potential partner on the investment. Whereas the former increases the firm's need to syndicate the investment, the latter reduces the firm's opportunity to do so, making it contingent upon the firm's status and reputation for attracting potential partners. Using data on first-round venture capital investments, we find that novel investments are more likely to be syndicated. Moreover, this relationship is stronger for firms with higher status and weaker for firms with higher reputation. These results highlight a relational aspect of uncertainty, inherent in a particular VC firm — investment dyad, and suggest that status and reputation play different roles in aligning the need and opportunity to syndicate novel investments.     

The influence of R&D investment on the use of corporate venture capital: An industry-level analysis

We consider how internal research and development (R&D) influences the use of corporate venture capital (CVC) and how this relationship varies across industries. We find that, in general, R&D investments increase the number of CVC deals in an industry. We also find that R&D investment has a particularly strong influence on the use of CVC in industries that are growing rapidly and changing technologically. Our analysis provides greater clarity on the relationships involving R&D and CVC in the presence of contingencies by integrating insights of absorptive capacity and real options reasoning.     

National distances,international experience,and venture capital investment performance

This study examines how the performance of cross-border venture capital investments is affected by national institutional and cultural distances between the environments of venture capitalists (VCs) and investee ventures. We propose that institutional and cultural distances will decrease VCs' effectiveness in conducting venture capital activities and negatively affect investment performance in terms of exit success, and obtain supportive evidence while controlling for geographic distance. We further analyze how VCs can use their international experience to mitigate the negative consequences of national distances. We find that while broad international experience in diverse countries attenuates the deleterious effects of institutional distance in a significant way, it does not have a similar impact in attenuating the negative effects of cultural distance.     

社会资本对农村家庭人力资本投资行为影响的实证分析

基于苏北农村的抽样调查,本文在控制了苏北农村家庭的年收入、未婚子女数量等变量之后,利用Eviews6.0的多元线性回归分析,考察了苏北农村家庭的社会资本对其人力资本投资状况的影响作用.研究发现,苏北农村家庭的社会资本对其人力资本投资具有不可忽略的作用,但并不具有非常积极的作用,具体表现为:家庭结构社会资本时家庭人力资本投资具有一定的促进作用,但作用的力度并不理想;而家庭认知社会资本与家庭人力资本投资却具有反向作用.     

企业投资决策的实物期权方法分析

在现代市场经济条件下,传统的投资决策方法已经不能适应于环境不确定而产生的动态投资管理的需要,因而,一种全新的投资决策分析工具———实物期权方法应运而生,在面对较大的环境不确定性情况下,实物期权方法则显得更为有效和科学。     

Formal institutions, culture, and venture capital activity: A cross-country analysis

Why does the level of venture capital activity vary across countries? This study suggests that the variation can be attributed to the different levels of formal institutional development. Further, this study proposes that venture capitalists respond differently to the incentives provided by formal institutions depending on different cultural settings. Analysis of VC activity for 68 countries during the 1996-2006 period shows that formal institutions have a positive effect on the level of venture capital activity, but this effect is weaker in more uncertainty-avoiding societies and in more collectivist societies. This study has useful theory and policy implications for venture capital and entrepreneurship development.     

Incremental impact of venture capital financing

This paper investigates the differences in the return generating process of venture capital (VC)-backed firms and their peers that operate without VC financing. Using a unique hand-picked database of 990 VC-backed Belgian firms and a complete population of Belgian small and medium-sized enterprises (SMEs), we focus on the extent to which the presence of a VC investor affects the sensitivity of a firm’s returns to the changes in the capital structure, in the operating cycle, and in the industry dynamics. The differences may stem from the (self-) selection of better companies into VC portfolios, from the venture capitalists’ (VCs) value-adding activities, and/or from both. We examine these factors in the context of a complex simulation procedure which allows separating selection from value-adding when traditional approaches are difficult to implement. Our results indicate that VC-backed firms are able to extract more rent from the changing industry conditions and from the optimizations in their capital structure. The presence of VCs in the firm’s equity seems to have only a marginal effect on the operating cycle efficiency. Overall, the results are suggestive of the value-adding being the main driver of the VC-backed firm’s performance.     

Financing entrepreneurship: Bank finance versus venture capital

This paper examines the entrepreneur's choice between bank finance and venture capital. With bank finance, the entrepreneur keeps full control of the firm and has efficient incentives to exert effort. With venture capital finance, there is a two-sided moral hazard problem as both the entrepreneur and venture capitalist (VC) provide unverifiable effort. The entrepreneur benefits from the VC's managerial input but must surrender partial ownership of the venture, thus diluting the entrepreneur's incentive to provide effort. Venture capital tends to be preferred to bank finance when VC productivity is high and entrepreneurial productivity is low.     

Determinants of required return in venture capital investments: a five-country study

Using two complementary theoretical perspectives, we develop hypotheses regarding the determinants of the return required by venture capitalists and test them on a sample of over 200 venture capital companies (VCCs) located in five countries. Consistent with resource-based theory, we find that early-stage specialists require a significantly higher return than other VCCs when investing in later-stage ventures. Consistent with financial theory, we find that acquisition/buyout specialists require a significantly lower return than other VCCs when investing in expansion companies. Furthermore, in comparison to specialists, highly stage-diversified VCCs require a significantly higher return for early-stage investments. Independent VCCs require a higher rate of return than captive or public VCCs. In general, higher required returns are associated with VCCs who provide more intensity of involvement, have shorter expected holding period of the investment, and being located in the US or UK (in comparison to those in France, Belgium, and The Netherlands).     

Closing the regional equity capital gap: The role of informal venture capital

There is evidence from a number of countries that small firms encounter a shortage of long-term investment finance, particularly at start-up and initial growth. Expansion of the institutional venture capital industry has done little to fill this equity gap on account of its preference for making large investments in established companies and management/leveraged buyouts. Moreover, the supply of venture capital exhibits a high level of spatial concentration. Initiatives by state/provincial and local governments, most notably in economically lagging regions, to increase the supply of risk capital for start-ups and early stage businesses have at best provided a very partial, and often costly, solution. A more appropriate approach to increasing the supply of start-up and early stage finance is to facilitate the more efficient operation of theinformal venture capital market. Informal investors, or business angels, are private investors who provide risk capital directly to new and growing businesses in which they have no family connection. Most business angels are unable to find sufficient investment opportunities and so have substantial uncommitted funds available. There is also considerable scope for expanding the population of business angels. The most cost-effective means of closing the equity gap is therefore for the public sector to underwrite the operating costs of business introduction services whose objective is to overcome the two main sources of inefficiency in the informal venture capital market, namely the invisibility of business angels and the high search costs of angels seeking investment opportunities and entrepreneurs seeking investors, by the provision of a channel of communication between informal investors and entrepreneurs seeking finance.     

国内房地产投资信托基金研究可视化分析

本文利用CiteSpace可视化软件对2004-2018年CNKI中文核心期刊及CSSCI中文社会科学引文数据库中研究房地产投资信托基金(REITs)的相关文献进行分析。通过统计发文量与高频被引文献以及绘制研究群体、机构、关键词等知识图谱,探究国内REITs研究的发展阶段、研究热点,并对研究趋势进行剖析。     

Agora Partnerships Nicaragua: A micro venture capital fund

Agora Partnerships is a micro venture capital fund founded by Benjamin Powell in the US and Ricardo T. Teran in Nicaragua. Agora started operations in 2005 with the goal of identifying and supporting entrepreneurs and business plans with high potential for success. The fund faces some unique challenges. First, the size of the businesses that is investing in does not allow for a traditional “management fee” structure. Secondly, traditional investment exits are nearly impossible in Nicaragua. This teaching case includes analysis on sources of investment capital, deal structures, and expected returns. The unresolved dilemma remains how to structure an investment proposal attractive to both investors and entrepreneurs. The case also allows discussing how to adapt the venture capital model to an emerging country like Nicaragua.     

Evaluation uncertainty of venture capitalists' investment criteria

This paper analyzes the decision process of venture capitalists. The study focuses on aligning the evaluation uncertainty in the decision criteria of venture capitalists with the progress of the process. The reasoning builds from the concept of search, experience and credence qualities, which was developed in the economics of information and allows the identification of the varying uncertainty of a single decision criterion compared to other criteria, along with uncertainty variations throughout the process. Exploratory empirical evidence suggests that in the early steps of the process in particular, management criteria are uncertain, while at the end of the process other criteria couple with uncertainty.     

风险投资赢利之道

关于风险投资,人们津津乐道的是它的高收益,使人"一夜暴富"的神话,如微软公司、雅虎公司等等。的确与其他投资相比,风险投资整体的获利水平,长时间内都保持在高于社会平均资本回报率的水平上。90年代以来风险投资的年平均收益率接近33%,其中1991年开始的摩根斯坦利二期风险投资基金年平均收益率高达66%。但是根据经济学理论,在资本自由流动的情况下,在全社会范围内会形成利润平均化的趋势,投资活动遵循"等量资本获得等量利润"的原则,超额利润只是一种暂时现象,那么风险投资是如何长期取得高收益的呢?     

Fast growing small entrepreneurial firms and their venture capital backers: An applied principal-agent analysis

First the empirical background of the U.K. venture capital industry is developed using a panel of major U.K. venture capital funds over the period 1988–92. Then a framework for applied principal agent analysis is developed, focusing on risk management and information. Under risk management it explores attitude to risk, risk sharing and bearing, and the effects of risk bearing on effort. Under information handling, it explores information systems, information asymmetries between investor (venture capitalist) and investee (entrepreneur), and ways of attenuating them, and information variance and costs. Finally, the contract between investor and investee is seen as a device for trading risk and information. The implications of this trading for risk bearing, effort and efficiency are explored. The whole analysis is supported by a detailed case study which reflects current practice in the U.K. venture capital industry. The evidence provides striking confirmation of the applicability of the principal-agent model to the venture capital financing of hightech ventures.     

Social capital of venture capitalists and start-up funding

How does the social capital of venture capitalists (VCs) affect the funding of start-ups? By building on the rich social capital literature, we hypothesize a positive effect of VCs?? social capital, derived from past syndication, on the amount of money that start-ups receive. Specifically, we argue that both structural and relational aspects of VCs?? social networks provide VCs with superior access to information about current investment objects and opportunities to leverage them in the future, increasing their willingness to invest in these firms. Our empirical results, derived from a novel dataset containing more than 1,500 first funding rounds in the Internet and IT sector, strongly confirm our hypotheses. We discuss the implications of our findings for theories of venture capital and entrepreneurship, showing that the role and effect of VCs?? social capital on start-up firms may be more complex than previously argued in the literature.