scholarly journals Measuring the Spillovers of Venture Capital

2020 ◽  
pp. 1-48
Author(s):  
Monika Schnitzer ◽  
Martin Watzinger
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Private Equity ◽  
Knowledge Spillovers ◽  
Fund Raising ◽  
Tax Credits ◽  
Venture Capital Investment ◽  
Start Up ◽  
Established Firms ◽  
Start Ups

This paper shows that venture capital investment in start-ups increases innovation of established companies in technologically related fields due to knowledge spillovers. To address endogeneity issues, we instrument R&D expenditures of established companies with statelevel R&D tax credits (Bloom, Schankerman, and Van Reenen, 2013), and venture capital investment with past fund-raising of private equity buy-out funds (Nanda and Rhodes-Kropf, 2013). Exploring the mechanism, we show that the patents of VC-financed start-ups are on average of higher quality, more novel and less protected by intellectual property rights than those of established firms, leading to significantly larger spillovers. This knowledge transfer between companies is enhanced by mobile start-up inventors.

Syndication in Venture Capital Investment in India: An Empirical Study

2017 ◽  
Vol 3 (2) ◽  
pp. 81-90 ◽  
Author(s):  
Sarita Mishra ◽  
Dinabandhu Bag
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Control Mechanism ◽  
Fiscal Year ◽  
Venture Capital Investment ◽  
The Past ◽  
Efficient Management ◽  
Common Trend ◽  
Start Up ◽  
Start Ups

Indian economy witnessed high inflow of capital for start-ups in current fiscal year through venture capital (VC) investment. From different Indian VC deals, it is evident that VC investors prefer to invest jointly. In other words, joint investment or co-investment or syndication is a common trend in Indian VC industry. VCs adopt this strategy to minimise their future uncertainties as a part of the control mechanism. In this study, an attempt is made to find out different determinants of this syndication strategy. The samples taken in this study are retrieved from Venture Intelligence database for the period 2005–2014. The data are analysed through linear regression and binomial logistic regression. Two empirical models have been developed. The derived models validate different control variables and deal with specific characteristics to comprehend the rationale of syndication mechanism. The findings of the study indicate that the past experience and the number of industry exposure of a VC in IT and ITES industry are the major predictors for a syndication decision. Subsequently, the precautionary investment attributes like number of investment round, stage funding, etc. draw the interest of potential co-investors in a syndicated deal. Syndication mechanism benefits the VC investors through sharing of risk of investment in a start-up and preparing them for a successful exit. Extant literature supports the results as Indian VC investors prefer to share the risk profile of a start-up business and adopt different risk diversion mechanisms to attract co-investors in the deal. Furthermore, the joint investment by investors drag more funding amount and also create more human capital for efficient management of the investment in VC-backed portfolio.

Urban Start-up Districts: Mapping Venture Capital and Start-up Activity Across ZIP Codes

2018 ◽  
Vol 32 (2) ◽  
pp. 99-118 ◽  
Author(s):  
Richard Florida ◽  
Karen M. King
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
The United States ◽  
Urban Neighborhoods ◽  
High Tech ◽  
Urban Theory ◽  
Venture Capital Investment ◽  
Technology Industry ◽  
Start Up ◽  
Start Ups

Previous research has identified the clustering of high-tech industries, entrepreneurial start-ups, and venture capital across metropolitan areas. Using detailed ZIP code data on start-up activity and venture capital investment, this research tests three hypotheses informed by urban theory on the clustering of innovation, entrepreneurship, and high-technology industry: (1) that start-up activity and venture capital investment will concentrate in distinct microclusters within metro areas, (2) that a substantial level of start-up activity and venture capital investment will cluster in dense urban neighborhoods or ZIP codes, and (3) that the clustering of start-ups and venture capital investment will vary by industry or type of technology. The authors find evidence to support all three. Start-up activity and venture capital investment are concentrated in a relatively small number of ZIP codes in the United States, the majority of which are in dense urban neighborhoods, and this clustering varies by industry and type of technology.

scholarly journals Private Equity and Venture Capital: an Empirical Analysis

Equilibrium ◽  
2011 ◽  
Vol 6 (2) ◽  
pp. 47-64 ◽  
Author(s):  
Marek Zinecker ◽  
Tomas Meluzin
Keyword(s):  
Venture Capital ◽  
Economic Crisis ◽  
Capital Investment ◽  
Private Equity ◽  
Western Europe ◽  
Central And Eastern Europe ◽  
European Market ◽  
Lower Intensity ◽  
Equity Financing ◽  
Venture Capital Investment

The paper deals with the analysis of the private equity and venture capital investment and divestment trends and activities on the European market, particularly on the market of Central and Eastern Europe (CEE), in times of economic crises 2007-2009. The analysis is based on the data published by the European Private Equity and Venture Capital Association (EVCA), the Czech Private Equity and Venture Capital Association (CVCA) and the Bundesverband Deutscher Kapitalbeteiligungsgesellschaften (BVK). The economic crisis in 2008-2009 caused a rapid cooling of the European market. Private equity and venture capital management companies located in Europe have decreased significantly both investment and divestment activity. The economic crisis on CEE market showed a delay and a lower intensity in comparison with Western Europe. CEE market is, however, underdeveloped. This argument is supported by the data indicating annual investment and divestment value, and number of companies received private equity financing.

scholarly journals PRIVATE EQUITY MARKET IN THE ECOSYSTEM OF START-UPS AND SME SECTOR – PART 1

2020 ◽  
Vol 49 (49) ◽  
Author(s):  
Tadeusz Waściński ◽  
Anna Dudkowska ◽  
Jevgenijs Kurovs
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Eastern European ◽  
The European Union ◽  
Investment Funds ◽  
Legal Form ◽  
Investment Companies ◽  
Start Up ◽  
Polish Economy ◽  
Start Ups

Private Equity (PE)/Venture Capital (VE) Funds cover medium and long-term transactions on the private enterprise market. They adopt a legal form of closed-ended investment funds or more and more appreciated alternative investment companies, which contribute to a development of innovativeness in the Polish economy, supporting enterprises on each level of their expansion. Over the last years, there has been an increased value of investment reported among the European PE funds. Poland’s share in the Central and Eastern European (CEE) investments has been the highest in the region and does not fall below 46%. Moreover, more than a double increase of domestic PE investments in 2017 is an opportunity for improving one of the lowest innovation indexes in the European Union. An important role in this matter also belongs to the growing power of start-up ecosystem. It is not without significance that there is a growing awareness of start-ups cooperating with funds, which is defined e.g. by a stronger position of investor or a limited possibility to negotiate the terms of investment agreements. The aim of this article is to present the PE market and its meaning in the development of young companies. Showing in the first part of the article statistics related to management of venture capital in Poland compared to Europe and the CEE will identify tendencies in development of the Polish PE market. It will also allow estimating Poland’s chances for improving its position in the innovative European ranking and increasing Poland’s competitiveness on the international level. Emphasising the importance of startup’s education in dealing with VC funds in the second part of the study will additionally highlight the essence of their cooperation in terms of professionalization of the PE market and a growth of the country’s innovativeness.

Organization and Financing of Innovation, and the Choice between Corporate and Independent Venture Capital

2009 ◽  
Vol 44 (6) ◽  
pp. 1291-1321 ◽  
Author(s):  
Paolo Fulghieri ◽  
Merih Sevilir
Keyword(s):  
Venture Capital ◽  
Strategic Alliances ◽  
Internal Resources ◽  
Start Up ◽  
Corporate Venture ◽  
External Organization ◽  
Rival Firms ◽  
Established Firms ◽  
Start Ups ◽  
The Impact

AbstractThis paper examines the impact of competition on the optimal organization and financing structures in innovation-intensive industries. We show that as an optimal response to competition, firms may choose external organization structures established in collaboration with specialized start-ups where they provide start-up financing from their own resources. As the intensity of the competition to innovate increases, firms move from internal to external organization of projects to increase the speed of product innovation and to obtain a competitive advantage with respect to rival firms in their industry. We also show that as the level of competition increases, firms provide a higher level of financing for externally organized projects in the form of corporate venture capital (CVC). Our results help explain the emergence of organization and financing arrangements such as CVC and strategic alliances, where large established firms organize their projects in collaboration with external specialized firms and provide financing for externally organized projects from their own internal resources.

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