Empirical evidence on a supply-driven Venture Capital market in the USA

2007 ◽  
Vol 1 (2) ◽  
pp. 207 ◽  
Author(s):  
Avi Messica ◽  
Tamir Agmon
Keyword(s):  
Venture Capital ◽  
Empirical Evidence ◽  
Capital Market ◽  
The Usa

scholarly journals Az innovatív kis- és középvállalkozások finanszírozása kockázati tőkével

2012 ◽  
Vol 7 (1-2) ◽  
pp. 24-29
Author(s):  
Judit Glavanits
Keyword(s):  
Venture Capital ◽  
Capital Market ◽  
Fund Raising ◽  
Market Size ◽  
Legal Rules ◽  
Venture Capital Fund ◽  
The Usa ◽  
Capital Financing ◽  
Closing The Gap

Closing the gap between the USA and EU venture capital market size is crutial for european innovative small and medium sized companies. As the financial crises started in 2008 weekend the possibilities for external capital, the role of venture capital financing is revaluated. The study analyses the similarities and differences in the legal rules of venture capital fund raising and financing revised by the USA's Dodd-Frank Act, and the European AIMF-directive. The study also suggest the changes in connection with the European Commission's prepared document on the European Venture Capital Fund, and it's effects on the innovative small-and medium sized companies. The conclusion is that the new rules of venture financing both in the USA and Europe sets up significantly more administrative difficulties for funds, but more stability and safe for entrepreneurs.

scholarly journals Rationale of securities and covenants in venture capital contracts: an application to South Africa

2008 ◽  
Vol 5 (4) ◽  
pp. 15-25
Author(s):  
Nancy Huyghebaert ◽  
Frederik J. Mostert
Keyword(s):  
South Africa ◽  
At Risk ◽  
Risk Factor ◽  
Venture Capital ◽  
Capital Market ◽  
Agency Problems ◽  
Venture Capitalists ◽  
Financial Contracts ◽  
The Usa ◽  
Capital At Risk

Venture capitalists are investing their money in portfolio enterprises and hence are putting their capital at risk. As portfolio enterprises may pursue different objectives than those of their financiers, venture capitalists may perceive agency problems as an important risk factor. Venture capitalists can limit the scope of these risks by specifying the form of financing that they provide to portfolio enterprises and/or by inserting particular covenants in their financial contracts. This paper first briefly reviews the various contractual provisions that can be used to decrease the extent of venture capitalists’ exposure to agency problems. Next, the importance of various securities and covenants is examined in the context of South Africa, where the venture capital market is still relatively young, but growing. Overall, it is concluded that venture capitalists in South Africa limit their exposure to risk, but in a different manner than is typically done in the USA

scholarly journals The Definition of Money Grand Received as a Key Determinant of Venture Investment Size in IT Russian Based Startups

2020 ◽  
Vol 14 (3) ◽  
pp. 19-27
Author(s):  
Ivan Rodionov ◽  
Alexander Semenov ◽  
Aleksey Oskin
Keyword(s):  
Venture Capital ◽  
Capital Market ◽  
Grant Support ◽  
The Usa ◽  
Investment Size ◽  
Definition Of ◽  
Private Venture ◽  
Grant Size ◽  
Legal Mechanism ◽  
The Impact

Since 2006, Russian policymakers have been actively taking various measures to stimulate the venture capital market. Government venture capital funds are being created, for example, the Russian Venture Company with a capital of 15 billion rubles. Since 2011, thanks to the new legal mechanism, state-owned companies begin to invest in private venture funds. These measures have led to increased fundraising for startups. The main mechanism of such financing is grant support for young companies. According to 2018, the amount of grants to the total amount of funds raised in Russia is one of the highest among developed and developing countries, for comparison in the USA, it is more than 2.5 times lower. The venture market specifics is such that when deciding whether to invest in a company, investors inevitably turn their attention to the previous rounds of financing the company. The purpose of the work is to analyze the effect of the money grant received on the volumes of attracting subsequent financing. To analyze the impact of the receiving money grant, the determinant approach was used, as the most common in research on this topic. Based on a sample of 184 Russian IT startups, two OLS models have built to show the effect of money grant size to follow-on investment rounds. As a result, various sets of determinants were considered that explain the volume of investments attracted by startups for both international markets and the Russian market. In addition, an excursus was conducted to study the effectiveness of government venture funds, which are the main grantors in the Russian venture market. Based on the results of previous studies on this topic, it was shown that the size of the money grant has a positive effect on the amount of funding attracted in both follow-on rounds. For comparison, a number of previous studies of the Russian venture capital market show that the investment size of the current round has influenced only by the previous fundraising. Such a result testifies to the attractiveness for investors Russian IT startups that received grant support. The scientific novelty of the article is that the amount of funding attracted by startups is explained by such a specific indicator as grant support. In addition, the results obtained have certain practical value for those who invest in Russian startups. Investing in startups that received grants increases the likelihood of an exit for the investor in the next investment round.

Counter-cyclical public venture capital: Debt-funding as an anti-austerity innovation strategy

2017 ◽  
Vol 56 (3) ◽  
pp. 477-495 ◽  
Author(s):  
Alex Etzkowitz ◽  
Henry Etzkowitz
Keyword(s):  
Venture Capital ◽  
Interest Rates ◽  
Innovation Strategy ◽  
Productive Capacity ◽  
Knowledge Based ◽  
Low Interest Rates ◽  
The Usa ◽  
The Business Cycle ◽  
Smart Specialization ◽  
Private Venture

This article outlines a counter-cyclical innovation strategy to achieve prosperity, derived from an innovative project, the California Institute for Regenerative Medicine (CIRM). We identify an ‘innovation paradox’ in that the very point in the business cycle, when legislators are tempted to view austerity as a cure for economic downturns and to reduce innovation spend, is when an increase is most needed to create new industries and jobs and innovate out of recession or depression. It is both desirable and possible that policymakers resist the urge to capitulate to the innovation paradox. During periods that exhibit subdued inflation, elevated spare productive capacity, and low government borrowing rates, governments should increase their borrowings and use the proceeds to boost investment targeted towards innovation. We show how the State of California successfully utilized debt financing, traditionally reserved for physical infrastructure projects, to stimulate the development of intellectual infrastructure. Finally, we recommend a halt to European austerity policies and a ‘triple helix’ broadening of narrow ‘smart specialization’ policies that chase a private venture capital chimera. Europe should seize the present macroeconomic opportunity of low interest rates, borrow for innovation and be paid back manifold by ‘picking winners’, similarly to what the USA has been doing through DARPA (Defense Advanced Research Projects Agency) with GPS, as a response to Sputnik, the Internet and artificial intelligence, or the driverless car, formerly known as the ‘autonomous land vehicle’ in its military guise. Proactively targeted macroscopic investments in innovation are needed to solve the productivity/employment puzzle and foster the transition to a knowledge-based society.

The Impact of Social Welfare Programs

1992 ◽  
Author(s):  
R. Cherry
Keyword(s):  
Social Welfare ◽  
Training Program ◽  
Empirical Evidence ◽  
Work Incentives ◽  
Welfare Programs ◽  
Social Welfare Programs ◽  
The Usa ◽  
The Impact ◽  
And Training

This article briefly reviews the conservative, liberal and radical approaches to social welfare programs, and compares these with empirical evidence from the USA. Conservatives stress that welfare programs reduce work incentives and undermine individual initiatives. Liberals suggest that cuts in welfare have created increased hardship without changing significantly the incentives to work. The Massachusetts Employment and Training Program is analyzed from both perspectives. The Program does not reduce benefits but instead increases work incentives. The results of this Program are skeptically reviewed by radicals as well as some liberals.

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