Entrepreneurial Finance in the Twenty-first Century, a Review of Factors Influencing Venture Capitalist’s Decision

2021 ◽  
pp. 097135572110256
Author(s):  
Ashish Vazirani ◽  
Titas Bhattacharjee
Keyword(s):  
Risk Premium ◽  
New Ventures ◽  
Investment Decisions ◽  
Quantitative Information ◽  
First Century ◽  
Theoretical Research ◽  
Venture Capitalists ◽  
Research Gaps ◽  
Qualitative Factors ◽  
Comprehensive Framework

Investments in new ventures are risky due to lack of conventional form of quantitative information and untested products. Venture capitalists (VCs) are seen to target such new ventures for high-risk premium but with little success. Existing research has investigated and identified a variety of qualitative factors that impact VCs’ investment decisions; however, many research gaps still exist. Works published in the last two decades show the evolution in the preference of factors with the focus shifting from venture’s team and product to factors such as intellectual property rights, economic crisis and social capital. It was found that the factor’s role was limited to the binary scale (positive and negative), which undermines its effect. The purpose of this review is to provide a comprehensive framework of factors that influence VCs’ investment decisions and show theoretical research gaps. Accordingly, we have segmented factors into two macro-categories: ‘internal’ and ‘external environment’, and presented a detailed framework of the factors that influence VCs’ investment decisions. Further, we argue to consider the subjectivity of qualitative factors and to explore the role of a factor in the decision-making.

scholarly journals Sustainable Investments in Responsible SMEs: That’s What’s Distinguish Government VCs from Private VCs

2021 ◽  
Vol 14 (1) ◽  
pp. 25
Author(s):  
Jeaneth Johansson ◽  
Malin Malmström ◽  
Joakim Wincent
Keyword(s):  
Decision Making ◽  
Investment Decisions ◽  
Societal Impact ◽  
Venture Capitalists ◽  
Decision Making Processes ◽  
Micro Level ◽  
Sustainable Investments ◽  
Private Venture ◽  
The Impact ◽  
Level Performance

Researchers question the impact of governmental venture capitalists (GVC) compared to private venture capitalists (PVC), but we know little about why this difference occurs and if this criticism is justified. We observed a group of GVCs and developed a new model that describes the way that GVCs process signals pre- and post-decisions. Certain macro level factors severely undermine micro level performance, causing GVCs to financially underperform with respect to PVCs. This helped us to understand that GVCs do not make investment decisions in the same way as PVCs, and what undermines the performance of GVCs’ decision-making processes. The main goals of GVCs are to promote investments in responsible SMEs, mobilizing societal impact. We discuss that the criticism of GVC needs to be more nuanced, as they have a different role than PVC in the financial system as providers of sustainable investments in responsible SMEs.

Entrepreneurial Passion, Cognitive Bias, and Technology Commercialization of New Ventures

2020 ◽  
pp. 148-163
Author(s):  
Biaoan Shan ◽  
Shuanghui Yan ◽  
Xifeng Lu ◽  
Datian Bi
Keyword(s):  
Cognitive Bias ◽  
Cognitive Theory ◽  
New Ventures ◽  
Theoretical Research ◽  
Illusion Of Control ◽  
Technology Commercialization ◽  
Risk Propensity ◽  
Mediating Role ◽  
Entrepreneurial Passion ◽  
The Relationship

This chapter utilizes cognitive theory to explain how entrepreneurial passion influences the speed of new venture's technology commercialization and explore the roles of cognitive bias (illusion of control and risk propensity) played in this process. The results show that both entrepreneurial passion and cognitive bias positively impact on the speed of technology commercialization. The authors also find that illusion of control and risk propensity play a partial mediating role in the relationship between entrepreneurial passion and the speed of technology commercialization. This conclusion can make up for the gap of existing theoretical research.

Apostles of Certainty

2018 ◽  
Author(s):  
C.W. Anderson
Keyword(s):  
Science And Technology Studies ◽  
Political Process ◽  
The United States ◽  
Quantitative Information ◽  
First Century ◽  
Truth Telling ◽  
News Reporting ◽  
Limited Degree ◽  
Professional Self ◽  
Data Journalism

Apostles of Certainty: Data Journalism and the Politics of Doubt traces the way American journalists have made use of quantitative information in their news reporting from the early twentieth century to the present day. In so doing, it examines changing notions of journalistic objectivity and truth telling, particularly as these have evolved alongside social science disciplines such as political science and sociology. Apostles of Certainty uses methodological techniques pioneered in science and technology studies to link the study of newsroom ontologies and epistemologies to a broader analysis of how public knowledge is produced and distributed in the digital age. Though largely historical, the book also sheds light on politics and media in the twenty-first century, with findings that speak to current public conversations around so-called post-truth and the spread of fake news. The book concludes that, viewed over the long term, journalistic reporting in the United States has improved in its accuracy, subtlety, and professional self-certainty, but we have not witnessed a simultaneous improvement in the conduct of US political discourse. In part this is because political journalism only influences politics to a limited degree. To the degree it does have an impact on the political process, the book argues that data-oriented journalism plays a largely tribal and aesthetic role and divides Americans into empirical “tribes” based in part on the perceived elitism of data-based reporting.

Exploiting Nanotech Opportunities: A Strategic Entrepreneurship Perspective

2008 ◽  
Vol 1106 ◽  
Author(s):  
Daniela Baglieri ◽  
Sara Giordani
Keyword(s):  
New Ventures ◽  
Global Market ◽  
Venture Capitalists ◽  
Due Diligence ◽  
Strategic Entrepreneurship ◽  
Emerging Industries ◽  
Regulatory Frameworks ◽  
The Us ◽  
The Right ◽  
Start Ups

AbstractThis paper analyzes the main challenges nanotech start-ups face in turning nanotech inventions into valuable and marketable nanotech innovations, also considering that nanotechnology discoveries could represent “inventions of methods of inventing” (Rothaermel et al., 2007). In the last decades, nanotechnologies have been a burgeoning area of science and engineering which show an increasing potential to transform a broad range of industries, and to boost the US and European firms' competitiveness (OECD, 1998). Although these emerging technologies share some problems with new ventures in other emerging industries ( e.g. biotech), nanotechnology firms have to balance the management of high technical and high market risk, still evolving regulatory frameworks (Bowman et al. 2006) and strategies for entering the business network and for attracting investments, e.g. in the form of potential venture capitalists. Potential investors, in turn, will face the well-known hurdle of the due diligence, considering for example health or safety concerns, manufacturing, availability of distribution channels, etc. (Burden, 2007).We propose that configuring their network and choosing the right market segment are the key strategies nanotech ventures should adopt in pushing their early growth in the global market. We analyze a sample of 15 European nanotech firms which confirm our predictions. Due to the novelty of the topic covered in this study, this research is exploratory in nature.

scholarly journals The Nexus Between Internal Investment and Economic Growth in Kenya

2020 ◽  
pp. 29-93
Author(s):  
Andrew K. Kamenju ◽  
Olweny
Keyword(s):  
Economic Growth ◽  
Risk Premium ◽  
Forecast Error ◽  
Public Investment ◽  
Investment Decisions ◽  
Public Private Partnership ◽  
Domestic Investment ◽  
Private Partnership ◽  
Real Gdp ◽  
The Government

Countries with a high investment GDP ratio benefit from better, competitive products and services. Which increases capital stock for production, more employment, and income; in turn reducing social and income disparities. The Kenyan government envisaged a sustained economic growth of 10% by investing in priority sectors; to become an industrialized middle-income country by the year 2030; though un-achieved to date. To examine the nexus between internal investments and economic growth, the study used annual time-series observations from the years 1996 to 2017; where internal investments are from the government; private domestic; and public-private partnership; and exogenous variables were rates of real interest; social discount; commercial lending interest; and the country risk premium on lending for investment decisions. The inference used stationarity; cointegration; significance; causality; variance decomposition of forecast error; and impulse response function. Stationarity tests suited the ARDL model which also supports small size observations. Findings were; a significant and positive influence on economic growth from lags of real GDP, government, private domestic, except public-private partnership investments. Anticipation for growth lies with; significant pairwise causality (real GDP with public investment); significant block exogeneity (public investment); endogeneity (real GDP), and exogeneity (public investment) influence; and short-run private domestic investment recovery. Keywords: ARDL, Economic Growth, Public Investment, Private Domestic Investment, Public-Private Partnership Investment, Investment Decisions.

scholarly journals Physiological Considerations to Support Podium Performance in Para-Athletes

2021 ◽  
Vol 2 ◽  
Author(s):  
Cameron M. Gee ◽  
Melissa A. Lacroix ◽  
Trent Stellingwerff ◽  
Erica H. Gavel ◽  
Heather M. Logan-Sprenger ◽  
...  
Keyword(s):  
Sport Participation ◽  
Case Reports ◽  
Case Series ◽  
Daily Practice ◽  
First Century ◽  
Future Research ◽  
Research Gaps ◽  
Research And Innovation ◽  
And Performance ◽  
Physiological Interventions

The twenty-first century has seen an increase in para-sport participation and the number of research publications on para-sport and the para-athlete. Unfortunately, the majority of publications are case reports/case series or study single impairment types in isolation. Indeed, an overview of how each International Paralympic Committee classifiable impairment type impact athlete physiology, health, and performance has not been forthcoming in the literature. This can make it challenging for practitioners to appropriately support para-athletes and implement evidence-based research in their daily practice. Moreover, the lack of a cohesive publication that reviews all classifiable impairment types through a physiological lens can make it challenging for researchers new to the field to gain an understanding of unique physiological challenges facing para-athletes and to appreciate the nuances of how various impairment types differentially impact para-athlete physiology. As such, the purpose of this review is to (1) summarize how International Paralympic Committee classifiable impairments alter the normal physiological responses to exercise; (2) provide an overview of “quick win” physiological interventions targeted toward specific para-athlete populations; (3) discuss unique practical considerations for the para-sport practitioner; (4) discuss research gaps and highlight areas for future research and innovation, and (5) provide suggestions for knowledge translation and knowledge sharing strategies to advance the field of para-sport research and its application by para-sport practitioners.

The Utilization of Quantitative and Qualitative Information in Groups' Capital Investment Decisions

2014 ◽  
Vol 27 (1) ◽  
pp. 1-24 ◽  
Author(s):  
Nicole P. Ang ◽  
Ken T. Trotman
Keyword(s):  
Capital Investment ◽  
Investment Decision ◽  
Investment Decisions ◽  
Quantitative Information ◽  
Data Availability ◽  
Strategic Decisions ◽  
Qualitative Information ◽  
Accounting Systems ◽  
Unique Information ◽  
Present Information

ABSTRACT Organizations frequently use interactive groups to make strategic decisions, aiming to capitalize on individual members' unique knowledge. However, research shows that groups focus on information that members have in common, not unique information, resulting in suboptimal outcomes. Given that accounting systems can present information in various forms, we experimentally examine whether quantitative information results in greater information sharing and use than qualitative information. We take advantage of a rich dataset created by videoing groups making a capital investment decision. Consistent with prior research, we find that groups prefer common to unique information, regardless of whether it is quantitative or qualitative. However, individuals use quantitative information more than qualitative information before group interaction, and make more references to it during discussion. Added insights from the videos include identifying what determines greater use of quantitative cues, the importance of the numbers attached to cues, and how successful groups use quantitative cues. Data Availability: Please contact the authors.

It is essentially acknowledged that discounted cash flows should always be calculated by management when making long-term investment decisions. Why is this so?

2021 ◽  
Vol 9 (3) ◽  
pp. 84-98
Author(s):  
Francis Kwadade-Cudjoe
Keyword(s):  
Competitive Advantage ◽  
Competitive Strategy ◽  
Investment Decisions ◽  
Cash Flows ◽  
Venture Capitalists ◽  
Cheap Labour ◽  
Fixed Assets ◽  
Goals And Objectives

Investment is sacrifices made now / future in anticipation of upcoming benefits. Long-term investment is the act of using money to acquire items, normally fixed assets, and is a pre-requisite for any modern organization to have them. Organizations are looking for capital to expand their frontiers to capture cheap labour for manufacturing their products, i.e. globalization. The struggle for survival of organizations, therefore hinge precariously on the ability of the enterprise to successfully invest in long-term debts, and managing the resource judiciously to thrive. However, banks and venture capitalists are not ready to contract loans to organizations not competitive. Moreover, the surge of covid-19 pandemic has made the situation dire, as there is no particular haven to fall on. In view of this, discounting the cash flows generated from business activities is perfectly right to accurately account for success of organizations. Non-discounting cash flows generated from business activities is not rigorous to properly account for success of organizations. In addition, the competitive strategy adopted by the organization is vital to enable management achieve its goals and objectives, and subsequently attain competitive advantage. Furthermore, it is paramount for the organization’s competitive advantage so achieved to be sustainable.

Unsystematic Risk and Enterprise Investment Attractiveness

2017 ◽  
Vol 22 ◽  
pp. 107-111 ◽  
Author(s):  
Olena Vakulchyk ◽  
Yelizaveta Protasova
Keyword(s):  
Economic Performance ◽  
Risk Premium ◽  
Mining Industry ◽  
Investment Decisions ◽  
Capitalization Rate ◽  
Enterprise Investment

The article is devoted to assessment of the enterprise investment attractiveness, based on the determining of degree of unsystematic risk in the part of capitalization rate. On the basis on certain integral indicators of economic performance of Ukrainian mining industry was calculated unsystematic risk premium that can serve as a criterion for investment decisions.

scholarly journals Due Diligence and Risk Alleviation in Innovative Ventures—An Alternative Investment Model from Islamic Finance

2021 ◽  
Vol 14 (6) ◽  
pp. 276
Author(s):  
Shahzadah Nayyar Jehan
Keyword(s):  
Survey Data ◽  
Field Survey ◽  
Islamic Law ◽  
New Ventures ◽  
Investment Model ◽  
Venture Capitalists ◽  
Due Diligence ◽  
Investment Projects ◽  
Success Stories ◽  
Venture Investment

Risk is a big concern for anyone contemplating investing in new, especially innovative ventures. However, if successful, the returns can be extraordinary, serving as an impetus for many venture capitalists to provide greater funding. Still, many new ventures never see the end of the tunnel, and success stories are scant. The venture capital market is growing, yet many investors feel on edge when investing in new and innovative ventures. This paper is based on field survey data to evaluate the importance of risk and return components of an alternative venture investment approach called diminishing Musharakah (DM). DM has roots in Islamic modes of investment that are more suited for ventures with a higher risk profile. This paper focuses on four key ingredients, i.e., due diligence (DD), flexibility (Flex), moral hazard reduction (MHR), and risk reduction (RR) inherent in this mode of investment. All these components contribute towards the end goal of any investment, i.e., value enhancement (VE). DM is based on investment modes approved by Islamic law, called Shariah, and Islamic jurisprudence, called Fiqh. The analysis and the paper’s results show that the proposed model is perceived as flexible enough to accommodate a wide variety of investment possibilities. The model carries the potential to encourage venture investment through various stages of growth of a venture. The findings are based on original perception data through a field survey across a broad spectrum of banking users who were interested in alternative and Islamic modes of investment. Findings and analysis of the survey data strongly support our connotations. We propose that the Shariah-based investment model presented in this paper will bring a vast new market into play, i.e., the Islamic money market, thus providing greater venture financing possibilities. As a result, we hope that the number of successful venture investment projects will significantly increase over time as we put the proposed investment model into use.

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