Venture Funds Research Articles

Asymmetric Naïveté: Beliefs About Self-Control

Do individuals anticipate time inconsistency in others? This paper jointly investigates beliefs about one’s own and others’ present bias. In an online laboratory experiment, participants engaged in a real-effort task display little awareness of their own present bias but anticipate present bias in others. Structurally, I estimate a present bias parameter [Formula: see text] of 0.82. Participants perceive others’ [Formula: see text] to be 0.87, indicating substantial sophistication, contrasted with 1.03 for themselves, indicating full naïveté. At the individual level, asymmetric naïveté correlates with overoptimism regarding one’s own versus others’ task enjoyment and time availability. The wedge in beliefs about present bias can inform equilibrium outcomes in a number of collaborative, competitive, and hierarchical settings, including teams in the workplace, management practices such as deadlines and tournament incentive schemes, and household consumption decisions. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: Financial support from the Laboratory for Economic Applications and Policy (Harvard University); Pershing Square Venture Fund for Research on the Foundations of Human Behavior (Harvard University); Harvard Business School (PhD Research Budget); and the Russell Sage Foundation (Small Research Grant) is gratefully acknowledged. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.01780 .

The Coming of Age of Venture Capital Investing in the New Fields of the Emerging MOGI Sectors: A Snapshot for the Future: Part 2

Venture Capital (VC) has become a chosen tool of investment in the areas of business where there seems to be potent promise but yet immature in terms of market, customer acceptance and political dynamics. Such uncertainties make bankers both nervous and hesitant,and where the risk takers like venture capitals thrive. In the first part of the article we discussed about how mineral,oil& gas and energy companies are becoming both investors of VC and attractive destinations for investment by other VCs. The VCs are mostly either Private Equities (PE) or the venture funds of established companies. They mostly invest in emerging technologies and risky, yet promising, opportunities. In this part we discuss how the risks are assessed and mitigated, what takes one to be the VC fund manager and the current dynamics in the VC investments. Risky as they are, VC investors always look for reasonable profit to exit investments, for the next set of investors to pursue the opportunities with the omnipresent risks.

УДОСКОНАЛЕННЯ ОРГАНІЗАЦІЙНОГО ЗАБЕЗПЕЧЕННЯ ПРОЦЕСУ ЗАЛУЧЕННЯ ФОРМИ ВЕНЧУРНОГО БІЗНЕСУ ДЛЯ РОЗВИТКУ ПІДПРИЄМСТВА В УМОВАХ ЦИФРОВІЗАЦІЇ ЕКОНОМІКИ

The necessity for improving the existing organizational framework for engaging venture business forms is justified, aiming to facilitate the implementation of new technologies, elevate production to a higher level, and enhance the competitiveness of enterprises in both domestic and international markets. The organizational support for involving venture business forms in the development of industrial enterprises in the conditions of economic digitization is enhanced. A scheme for selecting the organizational form of venture business and funding sources is proposed, allowing the utilization of digital transformation tools to increase the effectiveness of venture business engagement. Venture business is defined as entrepreneurial activity involving the infusion of risky investments into the innovative development of a knowledge-intensive industry, prone to potential growth. The following organizational forms of venture business are identified: "independent ventures," "external ventures," and "internal ventures". Various types of organizational forms of venture business and sources of their funding are considered. The engagement of venture business forms is carried out through financing the venture using various capital sources, specifically from the company's cash fund, funds from venture investors, and funds obtained from a venture fund. Using the PATTERN method, a goal tree for each form of venture business and funding source is constructed. The cost forecast for organizing an internal venture with funding from the company's own financial resources is conducted. The author also proposed an alternative venture financing option using the company's funds, such as raising funds from a venture fund through the sale of 10–20% of the company's shares. The proposed measures will enable industrial enterprises to overcome their crisis and become competitive in both external and internal markets.

FINANCIAL AND ECONOMIC PROSPECTS FOR CREATING GREEN ENERGY PROJECTS IN THE UKRAINE-POLAND COLLABORATION

This paper examines the economic and financial advantages of improving international collaboration between Ukraine and Poland in the development of alternative energy projects. It conducts a thorough evaluation of existing and forthcoming renewable energy generation technologies, using expert, Delphi, and methods based on statistics to identify the most promising and universally applicable solutions. The calculation of the payback period for small-scale green energy projects pays particular attention to the actual duration of the period in the case of small business ventures. The findings are summarized with a vision for the future Ukrainian-Polish cooperation in the scope of green energy cooperation and specific instruments and processes that could contribute to the success of the collaboration.The article outlines the potential approach that involves the isolation of the cooperation between Ukraine and Poland in green energy relying on the creation of investment and venture funds, public support for the manufacturing of a renewable energy component, and the establishment of non-volatile industrial complexes. Additionally, measures such as independent small alternative power plants and the initiatives for the development of the Ukrainian-Polish joint network of alternative energy are mentioned.The current war between Ukraine and Russia has drawn attention to the crucial need for energy security and diversification, making Ukraine-Poland collaboration on green energy projects all the more important. Ukraine may minimize its reliance on the Russian energy supply by focusing on renewable energy programs, while Poland can invest in sustainable energy to boost regional stability and economic progress. The article points out that the continuation and advancement of green energy initiatives require international cooperation. The paper offers detailed guidance on how the financial, economic, and technological opportunities and relations between Ukraine and Poland may be enhanced.

Анализ влияния корпоративного венчурного финансирования на развитие инновационных проектов на предприятии

The purpose of the work is a comparative analysis of corporate venture financing factors that influence the innovative activity of an enterprise. The object of research in the work is the system of financing innovative projects, and the subject of research is the factors influencing the results of the innovative activity of an enterprise. In the course of the work, the main tasks were solved, which are related to the analysis of factors of corporate ventures development and its growth points, the recognition of international trends in the corporate ventures development and the identification of key indicators of corporate venture financing which are necessary in the development of an effective system for financing innovative projects. The work shows the conditions and prerequisites for the development of corporate venture capitalism. The result of applying statistical methods (correlation analysis) is identification of four key factors of corporate venture financing that determine the innovative performance of the parent organization.

Venture Capital Investment and Growth of Small and Medium Enterprises (SMES) In Bayelsa State, Nigeria

The paper explored the impact of venture funding on the growth of Small and Medium Enterprises (SMEs) in Bayelsa State, Nigeria. Specifically, it investigates the effects of different venture capital financing methods, the cost of venture capital, and venture capital management support on sales growth within the SME sector. Using a survey research design, data was collected from 300 registered SMEs in Bayelsa State. Primary data was gathered through questionnaire instruments and analyzed using descriptive and inferential statistics. The findings, revealed through regression analysis, indicate that capital financing positively affects SMEs' sales growth, while the cost of capital also exerts a positive influence on sales growth. However, management support exhibits a negative effect on sales growth within SMEs. These results underscore the significance of venture capital financing mechanisms in fostering the growth of SMEs in Bayelsa State, Nigeria, while also highlighting potential areas for improvement in venture capital management practices to better support SME development.

The Role of Environmental, Social, and Governance Orientation for Venture Funding Success

The Role of Environmental, Social, and Governance Orientation for Venture Funding Success

B Corp Certification and Early-Stage Venture Funding

B Corp Certification and Early-Stage Venture Funding

Starting Off Strong: How Early Employees Influence Venture Funding in the AI Sector

Starting Off Strong: How Early Employees Influence Venture Funding in the AI Sector

Is “Open” ready for investment? A venture capitalist’s dilemma

Learning outcomes Upon completion of the case study, student will be able to discuss valuation of new-age ventures and understand how it is different from the valuation of organisations with a longer history; analyse the considerations (quantitative and qualitative) while evaluating investments in new-age ventures; and develop a framework involving the various dimensions of investment readiness. Case overview/synopsis The fintech space in India has seen an upsurge of activities since 2016. The growth of Paytm, RazorPay and many such ventures and the drastic improvements in this ecosystem have been significant catalysts for this segment of new-age tech companies. Funding and valuations have seen a sharp increase, especially when businesses worldwide felt the after-effects of the pandemic, with India being home to a large number of unicorns, second only to the USA. Open Financial Technologies Ltd (OPEN TECH) is one such venture that claimed its spot as the 100th unicorn of India within a span of five years since inception. With a strong focus on disrupting the banking sector in India, this neo-bank aspires to be the equivalent of Stripe in India and eventually be a strong competitor in the international market. Richard O’Neil is an active investor in the fintech space, based out of the UK, and he is currently looking to expand the market by considering investment options. In the process, Richard and his team have identified India as a viable and competitive market, as new venture support and funding are increasingly emphasized through policies such as Startup India, Make in India and many such more to sustain and propel its benefits. As the team was exploring ventures worth investing, Open Financial Technologies caught their attention. However, Richard, given his experience across fields and being a seasoned private equity investor, realised that valuing new-age companies is as much an art as it is a science. Multiple quantitative and qualitative aspects need to be considered while relevance of traditional valuation techniques to put a value on such entrepreneurial ventures is questioned. At this juncture, he finds it crucial to evaluate the investment readiness of OPEN TECH. This case allows students to understand how valuation of new ventures is different from that of established companies and analyse the crucial factors worth considering while evaluating an investment proposal as a venture capitalist, which eventually helps shape the funding pitch of an entrepreneur in the space. Complexity academic level This case study can be useful for students undertaking graduate- and executive-level courses on business valuation and strategy and entrepreneurship, as well as entrepreneurial finance elective at the undergraduate level. One could use this case in courses on entrepreneurship and innovation, such as an introductory course on entrepreneurial finance and a course on venture capital and private equity. It also allows discussion on fintech and neobanking and the valuation of privately held companies. Supplementary materials Teaching notes are available for educators only. Subject code CSS 1: Accounting and finance.

International Partnership as a Driver of Startups: Data on Canada and Israel

This study aims to analyze the opportunities and main directions of international cooperation for the activation of startups. To achieve this goal, the authors developed and implemented a comprehensive multi-stage research project based on a quantitative approach. The research used both the results of statistical observations and primary information obtained by online questionnaires. The questionnaires involved economically active people demonstrating an active interest in the organization of startups (408 questionnaires). The results of study may be valuable for public administration specialists in the field of innovation and entrepreneurship, specialists in business incubators and venture funds, as well as academic researchers.

Some aspects of state support of innovation processes in the region

The development of innovative activity of economicentities is one of the main objectives of the state policy.State instruments for support and development ofinnovation activity should provide support at all stagesof the innovation life cycle, from idea generation tosuccessful commercialisation of innovative products, andthe maximum effect will be achieved only taking intoaccount the integration of all participants of theinnovation process - from scientists and entrepreneursinnovatorsto venture funds and innovative enterprises.The innovation economy, based on scientific knowledgeand intellectual potential, is able to ensure the expandedreproduction of knowledge-intensive gross product ofboth the region and the country as a whole. The development of innovation processes is impossiblewithout the generation of new ideas, knowledge, projectinitiation at the initial stages of the innovation cycle, andwithout the use of venture capital investments at the finalstages. This problem is most difficult to solve in theregions, due to significant differences in their socioeconomicdevelopment, level of competence of scientificschools, sectoral specifics, level of concentration ofindustrial potential, including due to insufficientjustification of the directions of further development ofregions - innovation leaders. In order to support subprocessesrelated to resource provision, regionalauthorities can, on the basis of budgetary resources, forminnovation infrastructure institutions, such as: businessincubators, business accelerators, seed funds,technoparks, etc.; finance various innovation projects;invest in the development of human and intellectualcapital - in education, for training personnel ininnovation management, breakthrough scientifictechnologies, in the part of personnel training of thehighest level. At the same time, we need a promising model of longterminnovation development, which implies a gradualtransition from state to market-based instruments ofdevelopment and support of innovation activity,including innovation infrastructure functioning onmarket conditions.

Shadow capital in venture financing: Selection, valuation, and exit dynamic

Non-venture capital private equity funds (PEs) have become increasingly interested in investing in entrepreneurial firms. We investigate how PEs invest and perform in comparison to VCs, and the implication of PEs’ participation on ventures. We show that PEs are more likely to invest in ventures after typical investment period and when there was substantial capital overhang. PEs prefer the expansion and late-stage ventures. Investment size and valuation are larger/higher with PEs’ participation. We further find that IPOs and secondary buyout are more prevalent among ventures with PE investments. PEs’ participation also allows ventures more time to get ready for exit.

Theory and practice of cooperation in conducting scientific research and commercializing their results in the agroindustrial sector of the economy

The work examines nonlinear models of the innovation process (triple helix model and four-link helix model). The experience of the USA, EU, UK and Brazil in cooperation between science and the real sector of the economy in conducting scientific research and commercializing their results is presented. The features of the functioning of innovative venture funds founded by international agri-food corporations have been studied. In conclusion, directions for using promising foreign experience in the Republic of Belarus are proposed.

PUBLIC-PRIVATE PARTNERSHIP AS A TOOL FOR FINANCIAL SUPPORT OF THE ENERGY SECTOR IN UKRAINE: ANALYSIS, MECHANISM, FINANCIAL REPORTING

Based on the analysis of the dynamics of implementation of public-private partnership (PPP) projects in Ukraine, key problems have been identified and its priorities in financial support for the recovery of the native energy sector have been determined. It is appointed that PPP concession agreements are the main mechanisms for attracting investment in the global electric power industry. The expediency of using the concession model on BOT terms for the implementation of large projects in the energy sector is substantiated, which will contribute to the intensification of investment attraction and will allow to distribute risks between the state and business. Recommendations on the formation of an information platform for participants in the implementation of PPP projects on the basis of disclosure of information on the effectiveness of concession operations in accounting and financial statements have been developed. The tools for the formation of the financial mechanism of public-private partnership, where the priority is budget and venture financing, are substantiated. To make decisions on the implementation of PPP investment projects, an approach to assessing the financial support of project initiatives is recommended, the basis of which is the proposed criteria for compliance with financial security, the choice of funding sources, indicators of scenario analysis and efficiency. The proposed methodical approach to assessing the effectiveness of PPP allows us to assess the synergistic effect, which reflects the totality of economic, social and environmental effects. The formulated recommendations for improving the relationship between the state and business will contribute to the intensification of the attraction of private investment resources on the basis of PPPs for the restoration of the energy sector in Ukraine.

Startups and Angel Investors

The general objective of the research was to determine the advances related to the startups and angel investors. The specific objectives of the research are to identify the most successful angel investors and the countries where angel investors invest the most. Methodology, in this research, 41 documents have been selected, carried out in the period 2018 – 2024; including: scientific articles, review articles and information from websites of recognized organizations. Results, startups have a significant impact on the economy of countries, and go hand in hand with innovation and receiving timely investment. Unicorns achieve global recognition. The largest global markets for venture funding are The United States, China and United Kingdom. Conclusions, angel investors play an important role in financing startups, so it is necessary that they have support from government institutions. The top angel investors in the U.S are Peter Thiel, Ron Conway and Naval Ravikant. The top angel investors in Europe are: Avi Eyal, Danny Rimer and Philippe Botteri. The top angel investors in China are: Neil Shen (Sequoia China / ByteDance / Hong Kong, China), Richard Liu (5Y Capital / Xiaomi / Hong Kong, China) and Zhen Zhang (Gaorong Capital / Pinduoduo / Beijing, China) (Forbes, 2023). Here are 3 angel investors in Africa that should be on your radar: Jérémy Goillot, Réna Kakon and Axel Peyrere. The top angel investors in Australia are: Tracie Clark, Lisa Siganto and Richard Moore. The largest global markets for venture funding are The United States, China and United Kingdom. United Kingdom, Germany and France are the countries in Europe where business angel investments the most.

Mastering the Field: A Critical Analysis of 'Entrepreneurial Finance' by Leach and Melicher

About The Book Book Name: Entrepreneurial Finance, 7th Edition, 2020 Authors Name: J. Chris Leach, and Ronald W. Melicher, Publisher: Cengage Learning Publishing, Identifiers: ISBN 0357130731, 9780357130735 About The Authors J. Chris Leach is a distinguished academic and Professor at the Leeds School of Business, University of Colorado at Boulder. He is known for his exceptional teaching abilities, entrepreneurial background, and research in finance. Leach has received awards for teaching and has played an active role in startups since the 1970s. He is also a faculty advisor and mentor for the Deming Center Venture Fund. Ronald W. Melicher is a distinguished Professor of Finance at the same university. He is celebrated for his teaching abilities and has held key positions in the Finance Division. Ronald's expertise spans various finance topics and has taught at prestigious institutions globally. He is also recognized as an expert in financial management and firm valuation, offering consultancy services and conducting research in critical areas of finance.

СПОСОБЫ И ОСОБЕННОСТИ ВЕНЧУРНОГО ФИНАНСИРОВАНИЯ ВЫСОКИХ ТЕХНОЛОГИЙ НА ОСНОВЕ БЛОКЧЕЙН: АНАЛИЗ МИРОВОГО ОПЫТА

in this article, authors examine the features of venture financing of high technologies in foreign countries. The definition of high technologies is given, the essence of venture financing is determined, and its organizational types are studied. Based on the analysis of the global venture capital investment market and the US experience, the features of high-tech venture financing in foreign countries are revealed.

ФИНАНСИРОВАНИЕ РАЗВИТИЯ ЦИФРОВОЙ ЭКОНОМИКИ В СОВРЕМЕННЫХ УСЛОВИЯХ

The purpose of the study consists in identifying the main features of financing the digital economy’ development in Russian Federation. Research objectives are: to characterize the tools used to finance the development of the digital economy; to investigate conditions of financing the development of the digital economy in Russia; to find out actual problems that do not allow to increase funding for the development of the digital economy; to suggest possible solutions for funding’ increasing. Were found out negative dynamics in financing the development of the digital economy were revealed (gross domestic costs in 2022 fell to 3,4 percent of GDP, while the national project «Digital Economy» provides for their increase to more than 5 percent of GDP in 2024), associated with the decline in the scale of venture financing, the unavailability of crowdlending financing for many IT projects due to its high cost, the conservative approach of government institutions to financing private IT projects, startups. Are also developed measures to overcome the negative dynamics of gross domestic costs for the development of the digital economy in the Russian Federation, to intensify investment activity in the IT sector and to attract necessary resources for IT startups and other high-risk projects that will accelerate the digital transformation of the country and strengthen its national security.

ACTUALIZING THE VENTURING MODEL IN UKRAINE

The financing of innovations is the driving driver of the innovative model of development of any country, and Ukraine in particular. In modern conditions, the importance of venture capital for the economy of Ukraine is growing against the background of reducing alternatives to raising capital for the development of small and high-tech businesses. The reasons for the current state of decline in the innovation and investment process in Ukraine are analyzed and identified. Peculiarities of venture investment in Ukraine are studied. It is determined that the vast majority of venture capital institutions, regardless of their field of activity, are used mainly by large industrial and financial groups to preserve assets and minimize taxation, rather than to finance innovation. The obtained results give grounds for the conclusion that the essence of venture entrepreneurship in Ukraine does not correspond to the American and European models. The current conditions turn venture funds in Ukraine from an instrument of innovative development into a means of making a profit for large financial and industrial groups, which is a hidden reason for slowing down the innovation and investment process. An updated Ukrainian venture model is proposed, taking into account the peculiarities of the economy and a thorough rethinking of the existing structure of venture capital. The introduction of a rational combination of public, private, and research components of the investment process is proposed, i.e. the need to involve universities, scientists, and the scientific elite in the venture industry. It is determined that this model is only one of the components of a comprehensive program to stimulate investment demand, which also includes: ensuring macroeconomic stability; ensuring economic freedom; ensuring economic security; an increase of investment resource; impact on investment propensity; liberalization and development of the financial market; stimulating investment activities through the mechanism of state support for business and science partnerships.