Venture capital investments and patenting activity of high-tech start-ups: a micro-econometric firm-level analysis

Venture backed spin-offs represent a low proportion of companies, even of innovative companies. The research question was, whether these companies have an important role in innovation and economic growth. I present the most important indicators of innovation in connection with entrepreneurship, the measures of start-ups, mainly the high-tech ones. I describe the position of venture capital industry nowadays, detailing the classical venture capital investments, targeting high-growth potential small firms, even university spin-offs. The study presents the results of a survey made as a counterpart of an academic research team, examining spin-offs, entrepreneurs and technology transfer in the most important Hungarian universities. I found that the most important obstacles of venture capital investments in high-tech spin-offs are the information gap between demand and supply side, the lack of entrepreneurs’ willingness to give up freedom in decision making, despite of low managerial skills. The low quality of financial environment is also an obstacle of the segment. JEL Codes: G24, M13

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Governmental and Independent Venture Capital Investments in Europe: A Firm-Level Performance Analysis

SSRN Electronic Journal ◽

10.2139/ssrn.2294746 ◽

2013 ◽

Cited By ~ 9

Author(s):

Douglas J. Cumming ◽

Luca Grilli ◽

Samuele Murtinu

Keyword(s):

Performance Analysis ◽

Venture Capital ◽

Capital Investments ◽

Firm Level ◽

Venture Capital Investments ◽

Level Performance

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Financing High-tech Start-ups: Moral Hazard, Information Asymmetry and the Reallocation of Control Rights

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2013-0190 ◽

2015 ◽

Vol 15 (2) ◽

pp. 685-708 ◽

Cited By ~ 1

Author(s):

Ye (George) Jia

Keyword(s):

Venture Capital ◽

Information Asymmetry ◽

Private Information ◽

High Tech ◽

Capital Investments ◽

Control Rights ◽

High Tech Sector ◽

Hidden Actions ◽

High Level ◽

Venture Capital Investments

Abstract Recent data suggest that venture capital investments concentrate in the high-tech sector only in those countries where banks are not allowed to offer equity financing. To explain this fact, I develop a simple principal-agent model of start-up financing with both private information and hidden actions in which the equity investor can vary the level of control over the firm and the debt investor cannot. The model shows that when three commonly documented characteristics of the high-tech industry coexist, namely: (i) a high degree of information asymmetry, (ii) a high level of uncertainty about returns, and (iii) a large amount of R&D investments preceding production, then the ability to reallocate control rights that are contingent on performance becomes the key. Unlike debt contracts, equity contracts specify detailed provisions regarding the allocation of control rights. Thus, venture capitalists as equity holders have a clear advantage in financing young high-tech firms in places where banks are not allowed to offer equity contracts; in countries with no such restriction, they no longer have such an advantage. This result helps explain why most European governments’ efforts in promoting venture capital activities failed to attract such investments in the high-tech sector.

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University-Industry Collaboration With a Focus on Venture Capital Investments

University-Industry Collaboration Strategies in the Digital Era - Advances in Higher Education and Professional Development ◽

10.4018/978-1-7998-3901-9.ch012 ◽

2021 ◽

pp. 236-264

Author(s):

Serkan Sahin

Keyword(s):

Venture Capital ◽

Capital Markets ◽

Capital Market ◽

Business Models ◽

Market Development ◽

Capital Investments ◽

Industry Collaboration ◽

Start Ups ◽

Venture Capital Investments ◽

University Industry

Today, many countries are searching for financing alternatives which may contribute to the development of an economy. Funds provided by venture capitals may be considered as a vital funding source especially for start-ups. In particular, venture capital investments may enhance the available financing alternatives used to finance innovative business ideas. Policies supporting the capital market development may also boost innovative business ideas since the developed capital markets may attract higher amounts of venture capital investments. Hence, it seems possible that policies supporting innovative business ideas may contribute to this goal by supporting the development of the capital markets. This chapter aims to explain business models, financing alternatives, and exit strategies; give information about venture capital investments in Europe; propose a conceptual model for an improved university-industry collaboration via capital market development; and finally, empirically investigate the causal association between venture capital investments and capital market development.

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