OurCrowd: Growing a Crowdfunding Platform in a VC World

2015 ◽  
pp. 1-11
Author(s):  
Sarit Markovich ◽  
Evan Meagher
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Value Added ◽  
High Growth ◽  
International Markets ◽  
Value Proposition ◽  
Different Types ◽  
Incentive Problems ◽  
Venture Capital Firms ◽  
Private Investors

This case features the challenges of a startup in the crowdfunding space in 2015 as its leadership assesses potential sources of growth for the company s future. Founded in Israel in 2012 by a renowned venture capitalist, OurCrowd was a venture capital crowdfunding platform that strove to connect high-growth startups raising capital with accredited private investors from around the world. Its value proposition was to democratize an inefficient market for private equity that had historically been dominated by a small number of highly connected venture capital firms (VCs). The case asks students to put themselves in the shoes of OurCrowd s head of investor community as he prepares for a meeting with the company s board of directors to discuss potential strategies for growth: Should the company partner with the incumbent VCs it initially sought to disrupt, emphasize marketing its Portfolio Reserve fund, strive to provide its investors and investees with higher value-added services, target a broader swath of investors by aggressively marketing the platform in international markets, or attempt to go up-market and pursue increasingly larger deals with later-stage companies? Through assessing these options and discussing this case, students will learn about incentive problems in two-sided markets as well as how different types of crowdfunding platforms create value for users.

scholarly journals Private equity and venture capital in South Africa: A comparison of project financing decisions

2013 ◽  
Vol 16 (3) ◽  
pp. 258-278 ◽  
Author(s):  
David Portmann ◽  
Chipo Mlambo
Keyword(s):  
South Africa ◽  
Venture Capital ◽  
Private Equity ◽  
Venture Capitalists ◽  
Project Financing ◽  
Financing Decisions ◽  
Start Up ◽  
Risk Appetite ◽  
Investment Opportunities ◽  
Venture Capital Firms

This paper investigates the manner in which private equity and venture capital firms in South Africa assess investment opportunities. The analysis was facilitated using a survey containing both Likert-scale and open-ended questions. The key findings show that both private equity and venture capital firms rate the entrepreneur or management team higher than any other criterion or consideration. Private equity firms, however, emphasise financial criteria more than venture capitalists do. There is also an observable shift in the investment activities away from start-up funding, towards later-stage deals. Risk appetite has also declined post the financial crisis.

Value-added Activities of Venture Capitals in Entrepreneurial Finance: Evidence from the Growth of Flipkart

2021 ◽  
pp. 097282012199812
Author(s):  
Nirmalkumar Singh Moirangthem ◽  
Barnali Nag
Keyword(s):  
Venture Capital ◽  
Value Added ◽  
Entrepreneurial Finance ◽  
Venture Capital Firms ◽  
Public Offer ◽  
Angel Investors

Entrepreneurial finance varies as per the startup stage, such as bootstrapping, crowdfunding, angel investors, venture capital (VC), banks and initial public offer (IPO). Many times, entrepreneurial finance comes with knowledge, experience, innovation, value, etc., in addition to the fund brought in. Venture capitals are the most common such contributors. This study illustrates some significant value-added activities by venture capital firms operating in India. It explores some evidence from venture capitals such as Tiger Global, Accel Partners and DST Global who fund Flipkart, an Indian e-commerce firm.

Collaboration in Entrepreneurial Finance

2019 ◽  
pp. 371-393
Author(s):  
Douglas Cumming ◽  
Sofia Johan ◽  
Yelin Zhang
Keyword(s):  
Private Equity ◽  
Value Added ◽  
Future Research ◽  
Entrepreneurial Finance ◽  
Firm Investment ◽  
Different Types ◽  
Equity Funds ◽  
Technology Parks ◽  
Private Equity Funds ◽  
Different Sources

An important topic in some areas of finance involves syndication, which refers to more than one investor in an investee firm. Investment syndication involves collaboration, particularly where investors are value-added active investors, and there are potential agency problems among syndicated investors. This chapter reviews the literature on collaboration across different sources of entrepreneurial finance. In particular, it considers angel investors, crowdfunding, technology parks, and venture capital and private equity funds. The chapter identifies cases when different types of investors work well together, as well as cases where the evidence indicates collaboration has been less than fruitful. The chapter concluded by identifying avenues for future research.

scholarly journals Venture Capital’s Role in Financing Innovation: What We Know and How Much We Still Need to Learn

2020 ◽  
Vol 34 (3) ◽  
pp. 237-261 ◽  
Author(s):  
Josh Lerner ◽  
Ramana Nanda
Keyword(s):  
Venture Capital ◽  
Technological Change ◽  
Narrow Band ◽  
High Growth ◽  
Technological Innovations ◽  
Substantial Fraction ◽  
Welfare Impact ◽  
The Social ◽  
Capital Financing ◽  
Venture Capital Firms

Venture capital is associated with some of the most high-growth and influential firms in the world. Academics and practitioners have effectively articulated the strengths of the venture model. At the same time, venture capital financing also has real limitations in its ability to advance substantial technological change. Three issues are particularly concerning to us: 1) the very narrow band of technological innovations that fit the requirements of institutional venture capital investors; 2) the relatively small number of venture capital investors who hold and shape the direction of a substantial fraction of capital that is deployed into financing radical technological change; and 3) the relaxation in recent years of the intense emphasis on corporate governance by venture capital firms. While our ability to assess the social welfare impact of venture capital remains nascent, we hope that this article will stimulate discussion of and research into these questions.

scholarly journals Venture Capital and Private Equity Investment Strategies in Selected European Countries

e-Finanse ◽  
2015 ◽  
Vol 11 (4) ◽  
pp. 34-45
Author(s):  
Krzysztof Dziekoński ◽  
Sławomir Ignatiuk
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Research Question ◽  
High Growth ◽  
Equity Capital ◽  
Growth Potential ◽  
Investment Strategies ◽  
Equity Funds ◽  
Private Equity Funds ◽  
Entrepreneurial Activities

Abstract Private equity and venture capital (PE/VC) funding is the provision of equity capital by financial investors to non-quoted companies with high growth potential. It has a particular emphasis on entrepreneurial activities rather than on mature businesses. PE/VC investors differ on several dimensions including: investment targets, screening evaluation methods, governance mechanisms, and objectives. The paper is a continuation of the discussion that concerns investment strategies of PE/VC funds. While studying the PE/VC market it is important to analyze the origin and structure of capital. The authors assumed that different types of investors have different investment strategies. Our research is an attempt to answer the following research question: whether the investor type, on the European PE/VC market, has an impact on the selection of industries. The paper presents results of statistical analysis of venture capital and private equity funds investment strategies in selected countries.

scholarly journals Exploring the relationships between venture capital funds and venture-backed firms: A strategy process approach

2011 ◽  
Vol 8 (2) ◽  
pp. 120-130 ◽  
Author(s):  
Minoja Mario ◽  
Antonio Corvino ◽  
Giulia Romano ◽  
Marco Tutino
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Value Added ◽  
Strategy Implementation ◽  
Process Approach ◽  
Venture Capitalists ◽  
Strategy Process ◽  
Resources And Capabilities ◽  
And Performance ◽  
Shed Light

A great deal of studies have been carried out so far to explore the impacts of private equity or venture capital (VC) investors on their portfolio companies. Most of them focus on corporate governance, management composition and skills, competences, and performance. A lesser amount of studies have been conducted on how VC investments interact with backed firms’ strategy process. In the present paper we aim to shed light on this topic by investigating in which stage of backed firms’ strategy process venture capitalists (VCs) invest in them and explaining this choice in the light of the value they can deliver and simultaneously extract from them in the different stages of that process. After a cross comparison of eight cases of Italian firms in which venture capital funds have acquired minority stakes, we found that these investors do not challenge the intended strategy backed firms had undertaken, but help them implement this strategy by enriching their endowments of non business-related resources and capabilities. Furthermore, VCs seem to invest when the gap between the intended strategy and implemented strategy of backed firms is at intermediate levels. While at early stages of backed firms’ strategy implementation VCs tend to evaluate the risk of their investment as too high, at later stages they would not deliver a significant “value added” to backed firms themselves.

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

2017 ◽  
pp. 1-21
Author(s):  
Steven Rogers ◽  
Pat Vaccaro ◽  
Scott T. Whitaker
Keyword(s):  
New York ◽  
Venture Capital ◽  
Private Equity ◽  
Career Choices ◽  
The Other ◽  
Venture Capitalists ◽  
Venture Capital Firm ◽  
Executive Search ◽  
Venture Capital Firms

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.

scholarly journals Private Equity & Venture Capital

2020 ◽  
Author(s):  
Keith Arundale ◽  
Colin Mason
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Early Stage ◽  
High Growth ◽  
Government Support ◽  
Growth Trend ◽  
Public Companies ◽  
The Past ◽  
Under Performing ◽  
Start Ups

Private equity has successfully weathered economic crises in the past and appears to be well-placed to manage the current coronavirus crisis. Whilst both fundraising and investments will be significantly reduced from pre-pandemic levels for some time these are expected to recover and resume the historic overall growth trend. Private equity firms may find opportunities through taking undervalued public companies private and in restructuring under-performing businesses. However, start-ups may find seed and early stage finance hard to access. Government support measures need to meet the characteristics and needs of high growth enterprises.

scholarly journals Optimization of the System of Monitoring the Effectiveness of Venture Investments

2019 ◽  
Vol 8 (4) ◽  
pp. 2145-2150
Keyword(s):  
Research And Development ◽  
Venture Capital ◽  
Private Equity ◽  
Numerical Data ◽  
Advanced Manufacturing Technologies ◽  
Innovative Products ◽  
Venture Capital Firms ◽  
Manufacturing Technologies ◽  
High Level ◽  
The Impact

The paper discusses real examples of venture capital firms that have reached a high level, as well as start-ups that have not yet managed to become mature companies. The paper presents statistical data on venture investments in the form of tables and graphs for clarity and simplification of the perception of numerical data. The process of evaluating venture capital enterprises is described, which allows you to decide to invest money in a project or abandon such a decision. In the course of the research, scientific, comprehensive literature, periodical informational publications, and Internet resources of various types were used: websites of venture funds, Internet blogs of famous business angels, research articles on venture investment. The choice of diverse literature made it possible to approach the questions of research critically, which helped to ensure an independent assessment. Besides, scientific calculations were used from related fields - marketing, economic psychology, management, which allowed us to consider the topic from different angles, illuminating the subject and object of research from new perspectives. The economic and mathematical model for assessing the impact of venture network actors on the commercialization of innovative products at the regional level consists of the following indicators: advanced manufacturing technologies used; volume of innovative goods, works, services; the number of personnel engaged in research and development; grant of patents; amount of investment; domestic current expenditure on research and development; share of investments in 1 private equity and venture capital fund; share of expenses of the first organization for research and development.

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