Informal venture capital: a study of the investment process, the post-investment experience and investment performance

<p>Extant research on the international venture capital (VC) firms largely focuses on cross-country comparison; only a limited number of studies have examined the internationalization of VC firms and their strategies in host countries. This study approaches the research topic mainly from an institutional perspective, and intends to understand the performance of foreign VC firms in emerging economies, a topic that has rarely been examined in previous research. Using a sample of U.S. VC firms investing in China, this study finds that U.S. VC firms with more investment experience at home have weaker investment performance in China. The empirical results also show that U.S. VC firms investing in ventures with larger top management team, staging their investments, and syndicating with other U.S. VC firms are likely to achieve better performance in China. Contrary to what was hypothesized, syndicating with Chinese VC firms decreases U.S. VC firms’ investment performance in China.</p>

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Capital Riesgo Informal Y La Financiaciin De Nuevos Emprendimientos: Un Llamado Al Debate Acaddmico En Latinoammrica (Informal Venture Capital Funding New Entrepreneurial Activities: A Call to the Academic Forum in Latin America)

SSRN Electronic Journal ◽

10.2139/ssrn.2325469 ◽

2013 ◽

Author(s):

Izaias Martins

Keyword(s):

Latin America ◽

Venture Capital ◽

Venture Capital Funding ◽

Capital Funding ◽

Entrepreneurial Activities ◽

Informal Venture Capital

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How to Hit Home Runs: Portfolio Strategies and Returns in Formal and Informal Venture Capital

SSRN Electronic Journal ◽

10.2139/ssrn.3527412 ◽

2020 ◽

Author(s):

Andre Retterath ◽

Stylianos Kavadias

Keyword(s):

Venture Capital ◽

Portfolio Strategies ◽

Informal Venture Capital

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Chains of Freedom

10.1093/oso/9780198802945.003.0002 ◽

2017 ◽

Author(s):

Diane-Laure Arjaliès ◽

Philip Grant ◽

Iain Hardie ◽

Donald MacKenzie ◽

Ekaterina Svetlova

Keyword(s):

Detailed Examination ◽

Investment Performance ◽

Front Stage ◽

Back Stage ◽

Investment Process ◽

The Way

Chapter 2 begins the detailed examination of the investment chain. It introduces some of the main sets of intermediaries and what their jobs are. The chapter also sketches how those intermediaries enable and constrain each other and form audiences for each other’s presentations of self. Behind the pervasive ‘front-stage’ presentations of an orderly, rigorous investment process, suggests Chapter 2, there lies a normally hidden, more messy, Goffmanesque ‘back stage’ of failures, uncertainties, and sometimes dissent. The chapter also highlights the way in which the numbers that measure investment performance obscure the ethical-political, labour, and legal conditions that make them possible.

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Replicating Private Equity with Value Investing, Homemade Leverage, and Hold-to-Maturity Accounting

Review of Financial Studies ◽

10.1093/rfs/hhab020 ◽

2021 ◽

Author(s):

Erik Stafford

Keyword(s):

Private Equity ◽

Small Firms ◽

Publicly Traded ◽

Investment Performance ◽

Value Investing ◽

Equity Funds ◽

Private Equity Funds ◽

Asset Selection ◽

Investment Process ◽

Stock Portfolio

Abstract The contributions of asset selection and incremental leverage to buyout investment performance are more important than typically assumed or estimated to be. Buyout funds select small firms with distinct value characteristics. Public equities with these characteristics have high risk-adjusted returns relative to common factors. Adding incremental leverage to a publicly traded stock portfolio increases both risks and mean returns in this sample. Direct investments in private equity funds earn lower mean returns than a replicating strategy designed to mimic these key economic features of their investment process with public equities and brokerage loans.

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