Private Venture Research Articles

Venturing forth: Venture capital and private equity information in academic business libraries

ABSTRACTDue to limited disclosure requirements, obtaining private equity (PE) and venture capital (VC) information presents challenges to academic researchers. However, the universe of commercially available resources that focus on private equity and venture capital has increased substantially over the past decade. This article examines recent academic business literature to evaluate whether resources from newer providers in this subject area (CB Insights, PitchBook, Preqin, PrivCo) are gaining traction among academic researchers. It also matches the resources that researchers are citing to library holdings in an effort to measure library support for PE/VC research. The results indicate that data from traditional providers (Dow Jones, S&P Capital IQ, Thomson Reuters) continues to be heavily used and that libraries are providing moderate support for PE/VC research.

Special issue on private equity and venture capital topics

In the not-too-distant past, venture capital (VC) and private equity (PE) topics were rarely encountered in a business librarian's day-to-day activities. These types of reference interactions were ...

New Evidence on Mixed Syndication between Governmental and Private Venture Capital Firms in China

I investigate the performance of mixed syndication involving both governmental and private venture capital firms (GVCs and PVCs) in the context of China. Using the data on the investments in start-ups between 1999 and 2011, I find that start-ups backed by mixed syndication in their initial financing round are less likely to receive refinancing, compared to those backed by syndication solely among PVCs. I present evidence consistent with two possible mechanisms in explaining the underperformance of firms backed by mixed syndication: a potentially lower quality of portfolio companies due to the distorted risk premium, and less complementary resources but higher coordination cost in mixed syndication. The empirical results continue to hold when I use instrument variable method, propensity score matching analysis, Heckman treatment method, and endogenous switching regressions in mitigating the potential selection bias and endogeneity problems.

Counter-cyclical public venture capital: Debt-funding as an anti-austerity innovation strategy

This article outlines a counter-cyclical innovation strategy to achieve prosperity, derived from an innovative project, the California Institute for Regenerative Medicine (CIRM). We identify an ‘innovation paradox’ in that the very point in the business cycle, when legislators are tempted to view austerity as a cure for economic downturns and to reduce innovation spend, is when an increase is most needed to create new industries and jobs and innovate out of recession or depression. It is both desirable and possible that policymakers resist the urge to capitulate to the innovation paradox. During periods that exhibit subdued inflation, elevated spare productive capacity, and low government borrowing rates, governments should increase their borrowings and use the proceeds to boost investment targeted towards innovation. We show how the State of California successfully utilized debt financing, traditionally reserved for physical infrastructure projects, to stimulate the development of intellectual infrastructure. Finally, we recommend a halt to European austerity policies and a ‘triple helix’ broadening of narrow ‘smart specialization’ policies that chase a private venture capital chimera. Europe should seize the present macroeconomic opportunity of low interest rates, borrow for innovation and be paid back manifold by ‘picking winners’, similarly to what the USA has been doing through DARPA (Defense Advanced Research Projects Agency) with GPS, as a response to Sputnik, the Internet and artificial intelligence, or the driverless car, formerly known as the ‘autonomous land vehicle’ in its military guise. Proactively targeted macroscopic investments in innovation are needed to solve the productivity/employment puzzle and foster the transition to a knowledge-based society.

Effectives of private equity and venture capital investments comparing with stock and bond market

This paper examines approach and possibility of comparison of venture capital rate of returns with specific public benchmarks. Rate of return that are used by the public market analytics do not fit within venture capital cash flow characteristics. One of the methods that are presented in this article is Public Market Equivalent which enable simple comparison of venture capital rate of returns with effects of the public index or bond market for Bond Market Equivalent method.

Policy, Regulation and Private Equity: A Rich Research Agenda? (Book Chapter)

Effective from 2013, the Alternative Investment Fund Managers Directive (or AIFMD) fundamentally altered the regulatory environment for European private equity funds, establishing – for the first time – a set of pan-EU rules for private equity and venture capital funds with assets under management that exceeded certain thresholds. For many fund managers this has entailed considerable change that has permeated most aspects of their business, including additional capital requirements, stricter conduct of business rules, enhanced disclosures to regulators, investors and the outside world and, for some, has even required amendments to remuneration policies. It is not easy to discern a clear policy objective for many of these changes, and it is therefore hard to assess whether they achieved their aims. Certainly, in relation to many of the new rules, there is scant evidence that investors wanted them, nor that they will benefit from them; it is also unclear how the rules will alleviate systemic risk, particularly insofar as they apply to private equity funds. This Chapter reviews the rules that were included in AIFMD, seeks to identify their policy objectives, and suggests a research agenda that could assist policy-makers in future reviews of the Directive and further regulatory interventions in the sector.

Does a Venture Capital Market Exist in the Countries of Former Yugoslavia?

<p>Venture capital investments spread all over the world during the last few decades. Until then, they were considered only as an American phenomenon. Countries worldwide are interested in attracting venture capital investments because of their undisputable effects on the economy. The effects of the investments are visible through the impact on innovation, creation of new companies, jobs, economic growth, corporate governance and etc.</p><p>Venture capital is a subset of Private equity focused on start-up companies and companies having difficulties in attracting necessary capital. It represents an equity investment made for the launch, early development, or expansion of a business.</p><p>The countries of former Yugoslavia (Croatia, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia - FYROM, Montenegro, Slovenia and Serbia) are part of the Central and Eastern Europe countries and represent relatively a new market for venture capitalists. They moved from the planned economies to a free market system in the 90s of 20 century. As well as other countries in the World, these countries are also interested in attracting venture capital because of the proven impact on economic growth. Despite the presence of Venture capital and Private equity funds in this region for more than twenty years, the venture capital and private equity market in the countries of former Yugoslavia is underdeveloped compared to other countries of CEE. Indeed, the venture capital investments are so small for some countries of former Yugoslavia that the data about venture capital investment are published jointly.</p><p> </p><p>The objective of this paper is to examine and analyze the development of Venture Capital market in countries o former Yugoslavia. The research is both qualitative and quantitative, and involves an identification, analysis and comparison of PE/VC investments data for selected countries. The time frame for this research is between 2007 and 2014. The total volume of venture capital investments per year, the number of companies invested and the ratio of PE investments to the gross domestic product (GDP) will be used to demonstrate the existence of the venture capital market in countries of former Yugoslavia. The data necessary for the current research were taken from the yearbook of EVCA/PEREP Analytics for 2014 for Baltics and Ex-Y. „PEREP Analytics” is a centralized, non-commercial pan-European private equity database. The „PEREP Analytics” statistics platform monitors the development of private equity and venture capital in 25 European countries.</p>

Rufus Rivers and Career Choices in Private Equity and Venture Capital Finance

Rufus Rivers, managing director and co-head of mezzanine investing at The Carlyle Group, is reviewing two employment offers he recently received. One came from RLJ Equity Partners, a private equity firm headquartered in the metropolitan Washington, D.C., area. The other came via Glocap Search, a New York-based executive search firm specializing in placing top private equity executives in premier venture capital roles. The Glocap recruiter had told Rivers that he had been selected as the leading candidate for a position with an established Boston-area venture capital firm that had several exciting investment prospects. In the next few days, Rivers needs to consider his personal and professional interests and make a decision: Should he go to Washington, go to Boston, or stay put—and on what terms?Learn about the different kinds of opportunities available to venture capitalists; Assess whether becoming venture capitalists themselves is worthwhile; Learn how venture capital firms offer positions and the terms under which joining a venture capital firm might make sense for them in their careers.

Private Equity and Venture Capital Growth and Performance in Emerging Markets

Brazil was one of the emerging markets that most received Private Equity (PE) and Venture Capital (VC) investments in the last 10 years. The industry is fairly new in the country, with a limited number of experienced managers. As many PE firms have raised new funds greater than USD 1 billion, the number of investments managed simultaneously has increased, thus putting pressure on PE/VC firms to hire and train new members for their teams. The aim of this study is to investigate whether this growth has compromised investment performance. Our data was collected in PPMs (Private Placement Memorandum) from 1994 to 2014, totalizing 311 deals. We find evidence that a greater number of simultaneous deals decrease the probability of total loss for both PE and for VC, possibly reflecting the improvement in the investment selection process. However, when we analyze only the PE investments that returned at least part of the invested capital, our results indicate that an increase in simultaneously managed deals has a negative effect on performance, probably reflecting a drop in the efficiency in monitoring them. When it comes to VC, we find weak evidence that a larger number of deals simultaneously managed can positively affect the return.

Novo pravno uređenje private equity i venture capital fondova i otvorena pitanja

U radu se analizira novo pravno uređenje alternativnih investicijskih fondova rizičnog kapitala (private equity) i alternativnih investicijskih fondova poduzetničkog kapitala (venture capital) koji su u hrvatskom pravu uređeni Zakonom o alternativnim investicijskim fondovima i podzakonskim aktima. Njihovi udjeli nude se privatnom ponudom u prvom redu profesionalnim, odnosno kvalifi ciranim ulagateljima. Kapital pribavljen od ulagatelja ti fondovi ulažu ponajprije u dionice i udjele trgovačkih društava, bilo da se radi o novoosnovanim društvima, odnosno društvima koja su u razvoju ili onima koji se nalaze u već zreloj fazi. Stoga je njihov značaj za trgovačka društva velik jer omogućavaju i malim poduzetnicima pribavljanje sredstava za fi nanciranje poslovne djelatnosti kada su im klasični izvori fi nanciranja nedostupni. S obzirom na to da se radi o tržišnom segmentu investicijskih fondova koji se u domaćoj poslovnoj praksi tek razvija i čiji se potencijal tek počinje prepoznavati, ovim se radom ispituju transakcijske osobitosti ovog oblika ulaganja između private equity (dalje u tekstu: PE) i venture capital (dalje u tekstu: VC) fonda i društva u koje taj fond ulaže (portfeljno društvo). Iako pravno uređenje PE i VC fondova nije usklađeno na razini Europske unije (dalje u tekstu: EU) već samo pravno uređenje njihovih upravitelja, obrađuju se oni pravni izvori EU-a kao i korespondentni propisi u RH, kojima se reguliraju određeni aspekti poslovanja tih fondova, a koji utječu na pravne odnose između PE ili VC fonda i porfteljnog društva kada fondovi u portfeljnom društvu stječu kontrolu. U tom kontekstu otvara se pitanje postoje li određeni mehanizmi kojima se može osigurati da PE ili VC fond svoj utjecaj u portfeljnom društvu ostvaruje na društveno odgovoran način s obzirom na to da ima složen zadatak usklađivanja dvaju (moguće) suprotstavljenih interesa: interesa portfeljnog društva, o čemu je dužan voditi računa kao njegov dioničar i interesa ulagatelja koji su uložili u taj fond.

The Privatization Conundrum in Ghana: Lessons from Golden Tulip Hotel in Accra

Since independence, there have been copious generalizations and general outcry among Ghanaians especially social commentators and policy analysts about the under-development of Ghana. One of the factors that accounted for the slow pace of development of the country is the limited attention paid to the provision of enabling the environment to facilitate the boom of the private sector. Is the private sector not contributing enough to attract the necessary attention of government? Whatever the case may be the crux of this work is that: nurturing the private sector by the government is more likely to contribute largely to the development of Ghana. This work explores the developmental models of Ghanaian governments and the private sector, the rationale for privatization and as its case study, examines the contributions of Golden Tulip, Accra; previously a public enterprise but now ceded to a private venture to test the tentative statement. The work examines whether the contributions of the private sector specifically Golden Tulip to national development is better than when it was under state ownership. Using in-depth interview and secondary data, the measures of improvement in hotel Continental after it has been privatized and rebranded as Golden Tulip include: employment, payment of taxes, financial viability, welfare services among others. The study combines information from both primary and secondary sources. Primary information is obtained from a personal interview conducted by experts in the public and private sectors as well as in academia and focus group discussions. While secondary source data is taken from both published and unpublished scholarly works and articles on the topic. It is found that the development of the private sector should not be seen as an end in itself but as part of the means of promoting a better standard of living, foster development. In addition, when the enabling environment is created it will contribute largely to the development of Ghana. Also, it has been discovered that the private is bedevilled with the following challenges: lack of political commitment to private sector’s development, reluctance of financial institutions to take risks with private sector bodies, inadequate entrepreneurial skills of some private sector operators, bureaucratic practices among the public sector regulators or supervisory bodies, non-accrual of the benefits of the private sector development to micro and small enterprise sector among others. The research finally makes inferences, deductions, conclusions and recommendations necessary for the development of Ghana and for the readership of all and sundry especially the management of Golden Tulip, Accra which may be interested in the subject.

Introduction to RNA Vaccines.

RNA vaccines are attractive, because they exhibit characteristics of subunit vaccines and live-attenuated vectors, including flexible production and induction of both humoral and cellular immunity. While human proof-of-concept for RNA vaccines is still pending, the nascent field of RNA therapeutics has already attracted substantial industry and government funding as well as record investments of private venture capital. Most recently, the WHO acknowledged messenger RNA (mRNA) as a new therapeutic class. In this chapter, we briefly review key developments in RNA vaccines and outline the contents of this volume of Methods in Molecular Biology.

Antera: os desafios da gestão do capital empreendedor

Este caso descreve os desafios encontrados por uma gestora de fundos de investimentos em Private Equity e Venture Capital (PE&VC), cujo crescimento é impulsionado pela crescente demanda por capital semente no Brasil, e as consequentes mudanças e adaptações que o mercado nacional impõe ao modelo de investimento, que, embora já seja validado internacionalmente, carece de muito desenvolvimento no país. As métricas usadas para avaliar risco e retorno de cada projeto e a ordenação dos projetos candidatos, a expansão da empresa com a chegada de um novo fundo de investimento na carteira e a iliquidez característica do investimento estão por trás dos dilemas enfrentados pelos sócios. Nesse contexto, o professor deverá trabalhar com os alunos as implicações dos elementos discutidos no caso e as opções existentes para a gestora de forma a construir uma estratégia sustentável para seleção de empresas investidas.

The Determinants of Private Equity and Venture Capital Fundraising in Brazil

The positive impact of the Private Equity and Venture Capital (PE/VC) investments in the economy and in the capital markets is widely documented in the international literature. However, studies about the determinants of PE/VC fundraising are relatively scarce and their results are far from being unanimous. Notwithstanding the fast growing importance of the PE/VC industry to the Brazilian economy, several answers that intrigue both academia and practitioners remain unknown. This paper sheds a light on one of the most critical questions in the PE/VC industry: what are the determinants of PE/VC fundraising in Brazil? At the best of my knowledge, it is the first study about which variables drive investor’s allocation in this asset class in Brazil. Based on a supply-and-demand model of PE/VC funds described by Gompers and Lerner (1998), I empirically test the determinants of the PE/VC activity in Brazil. I use a unique database for an industrywide and a firm level analysis, and my findings are in line with several empirical results worldwide. I show that interest rates, stock market returns, IPO activity level, industry’s regulation and investors’ taxation have impact on the Brazilian PE/VC fundraising activity.

Impact of public seed-funding on academic spin-offs

In the entrepreneurial economy of today, it is not the multinational firms which are the predominant driver in the creation of new knowledge, but the individual entrepreneur. Correspondingly, new ventures of small size are leading in commercializing new knowledge and transferring it to the market. This economic shift has been reflected by broad entrepreneurship policies, which aim at supporting the individual on the challenge of a high-growth start-up. However, prior experience shows that uniform entrepreneurship policies do not address the individual needs in different countries and ecosystems adequately. In this paper, we study the performance of academic spin-offs that received public funding from the German EXIST Business Start-Up Grant, a support program which aims at increasing the number of innovative start-ups from academia. Using a control group matching approach, we provide evidence that these start-ups are smaller by two full time equivalent employees, generate 1.7 times higher losses and have a nearly three times lower return on capital than science-based entrepreneurial firms with comparable characteristics in the first 5 years after foundation. We interpret these results to be primarily caused by the inferior financial contracting structure of the program compared to private venture capital funding and by the resulting adverse selection and incentive effects on the entrepreneurs. The evidence calls for rethinking public interventions in a national system of entrepreneurship.

Private Equity and Venture Capital Funds: What Drives the Demand and Supply?

This study investigates determinants for the demand and supply for PE/VC funds. Six factors were identified through Factor Analysis: Economic Activity, Development of Stock Markets, Corporate Governance, Social and Environmental Development, Entrepreneurship and Taxation. These factors were defined through 25 variables and transformed into five factors by factor analysis. The resulting factors were used in econometric models for investigating relationships among said factors and the fundraising of PE/VC funds first, and then with the amount invested by PE/VC funds. The results indicate that investments are adversely affected by the depth of the capital market: the PE/VC funds seek an exit strategy which the stock market offers through IPOs (Initial Public Offering). Other significant factors were protection of investors, social and environmental development and level of entrepreneurship. Different from expected, the economic activity was of low impact on demand. The result seems controversial but its lack of significance highlights the importance of the capital market (through IPOs as a way of disinvestment) as a key driver of the PE/VC market. Taxation was also not significant to the demand side, a fact which denotes that the government can influence the local PE/VC market, and that it should offer high enough discount rates or tax incentives to mitigate the effect of other barriers faced by the PE/VC market.

A Study of Firm Exit Decisions: The Interplay of Private and Social Signals

This study examines how organizations' private information obtained from performance feedback is moderated by social learning mechanisms. Building on inferential learning and market categorization literatures, my theory suggests that even when organizations experience multiple performance failures, they are not likely to exit the market when a substantial number of peers have entered the industry. On the contrary, they are more likely to exit the market when a relatively large number of peers have exited. The latter relationship is weakened when the average number of industries with which exiting peers engage is greater. This is because decision makers regard the exits of those who are involved in diverse categories as involuntary actions rather than signaling a negative market situation, and they rely less on such signals. I test my theory using longitudinal data on the exit decisions of 1,405 U.S. private venture capital firms from 1987 to 2014.

Government Venture Capital and Cross-Border Investment

Do government venture capital (GVC) funds crowd-in or crowd-out international private venture capital (PVC) investment? The crowding-in effect arises when international PVC benefits from government...

Introduction: Beyond the Nation

Introduction:Beyond the Nation Enda Delaney (bio) and Ciaran O’Neill (bio) In April 2016 a much-anticipated diaspora museum called EPIC Ireland opened up in the CHQ Building on Custom House Quay in Dublin. Its tagline reads, “the unique global journey of the Irish people.”1 EPIC Ireland is aiming for a blend of domestic and tourist footfall, hoping to offer a slightly cheaper alternative to the twenty-euro entrance fee handed over by 1.1 million tourists to the Guinness Storehouse every year. For sixteen euros at EPIC Ireland the visitor can find a mixture of celebratory accounts of Irish lives that have been carefully gender-balanced and calibrated to accentuate Irish American connections throughout—a reflection of the likely audience. Curated and managed by CHL Consulting—the people who brought us the Titanic Museum in Belfast in 2011—this is billed as an “experience,” not a museum, and one that will effectively take the place of a national diaspora museum. It is an entirely private venture backed by E. Neville Isdell, the former chairman and CEO of the Coca-Cola corporation, who was born in County Down.2 One of the most interesting things about this experience is how much of the “journey” and “story” takes place off the island of Ireland. In one experiential display the visitor can sit down at an empty table adjacent to a floor-to-ceiling simulation of the interior of an Irish pub—complete with craic, ceol, agus caint on loop—but this turns out to have been filmed at a pub in London. In another room we learn that the Barbadian pop star Rihanna is part Irish, along with Boy George, Johnny Rotten, The Beatles, and Morrissey. In all, some 372 Irish lives are “celebrated” in the exhibition. Generational distance, partition, ethnic purity, and hyphenated Irishness are the sort of topics left underinterrogated by EPIC Ireland. Instead, we experience an [End Page 7] emotionally transnational account of Irish identity and potential. Mid-exhibition, a quote from former president Mary Robinson exhorts: “After all, emigration is not just a chronicle of sorrow and regret. It is also a powerful story of contribution and adaptation. … In fact, I have become more convinced each year that this great narrative of dispossession and belonging, which so often had its origins in sorrow and leave-taking, has become, with a certain amount of historic irony, one of the treasures of our society.”3 If we can leave our academic skepticism of such a binary to one side for a moment, we can see a kernel of truth within this remark. The Irish relationship to exile, migration, and its own diaspora is a most conflicted and contradictory one. It can be seen as a burden, an embarrassment, or a mark of domestic economic and cultural failure. For some it is a wellspring of celebratory stories, triumph over adversity, endurance, and emergence. Framed in relation to EPIC Ireland, the diaspora is a resource, both cultural and financial, that can be commodified, repackaged, and monetized. Such an attitude is sometimes met with resistance. This is the feeling of “shakedown” so resented by the actor Gabriel Byrne when the Fáilte Ireland tourist initiative “The Gathering” was announced in 2013. Byrne’s much-quoted comments, delivered on live Irish radio in November 2012, illustrate the point: The only time the diaspora or Irish Americans are ever mentioned is as tourists and “how can we get these people here to boost our tourism and how can we get people back here so that we can shake them down for a few quid?” One guy I know, who’s a plumber in Philadelphia, said to me, “Do they not understand that there’s a huge recession here? I’m a plumber and I can’t afford to get on a plane and bring my family back to see a game of hurling in Belmullet, or wherever it is.”4 Byrne, who has since distanced himself from these remarks, was thinking of the same awkward relationship between diaspora and [End Page 8] “home” as can be felt in reverse in Bernard Canavan’s wonderful painting Vertigo II on our front...

Сравнительная характеристика становления инновационной политики США и Японии

Інноваційний складник ‑ це основа сучасного розвитку бізнесу, незалежно від того, до якої галузі цей бізнес належить, хто його господар, яка структура його капіталу. Виклики сучасного соціуму змушують активізувати зусилля країн, що розвиваються, у напрямку розвитку інноваційної інфраструктури, яка б дозволила зробити якісний ривок у розвитку промисловості та економіки. Саме ці виклики зумовили актуальність обраного дослідження. Становлення і розвиток інноваційної політики в економіках, що розвиваються, ‑ актуальне завдання останніх досліджень багатьох авторів. Виявлення загальних тенденцій розвитку провідних країн дозволить виробити спільну стратегію для країн, що розвиваються, у подальшому становленні їх інноваційної політики.
 Метою написання статті стало проведення аналізу становлення інноваційної політики в провідних країнах світу, таких як США і Японія, для виявлення особливостей цих країн, спільних рис і відмінностей. Під час дослідження застосовано методи порівняння, узагальнення, абстрагування, аналіз, елементи системного аналізу, елементи алгоритмізації та моделювання.
 У результаті дослідження було виявлено особливості становлення і розвитку інноваційної політики США і Японії, при цьому одержано такі висновки:
 1. Розвиток інноваційної політики держави зростає в тому випадку, коли координацію і ключове фінансування здійснює держава, а також місцеві органи управління.
 2. Найбільший ефект у розвитку інноваційної діяльності для країни з перехідною економікою можна спостерігати, в році обирання «селективних» напрямів розвитку.
 3. Створення регіональних технопарків відбувається з урахуванням історично сформованих регіональних можливостей і напрямів.
 4. Затвердження законодавчої бази в країні, яка повинна всебічно підтримувати (на всіх рівнях) інноваційне підприємництво.
 5. Формування системи приватних (венчурних) фондів, регульованих державними програмами за прерогативними напрямами.
 На сучасному етапі розвитку світової економіки тільки інноваційна політика зумовлює вектор розвитку держави. Це підтверджує досвід таких провідних держав, як США і Японія. У результаті узагальнення досвіду становлення інноваційної політики цих країн було виявлено основні тенденції розвитку, які можна застосовувати в інших країнах, що розвиваються, із урахуванням їх національних особливостей. Усі виявлені чинники позитивно впливають на збільшення прогресивних показників економіки, добробуту суспільства та активності інтеграції на міжнародному рівні.
 Новизна роботи полягає в тому, що вперше було проаналізовано становлення інноваційної політики в США і Японії для виявлення загальних рис і відмінностей у розвитку інноваційної політики, а також зроблено спробу отримання схеми створення базової структури, що дозволяє розробляти і впроваджувати інновації.
 Отримані результати можуть бути застосовані для подальшої систематизації інформації щодо розвитку інноваційної політики для формулювання універсальної моделі.
 Рис. 1. Табл. 3. Бібл. 11.