scholarly journals Growth and venture capital investment potential for university spin-offs in Hungary

2013 ◽  
Vol 7 (4-5) ◽  
pp. 31-38 ◽  
Author(s):  
Patrícia Becsky-Nagy
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Small Firms ◽  
Research Question ◽  
Academic Research ◽  
High Growth ◽  
Growth Potential ◽  
High Tech ◽  
Capital Investments ◽  
Venture Capital Investments

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

scholarly journals REAL OPTION ANALYSIS OF VENTURE CAPITAL INVESTMENTS

2020 ◽  
Vol 3 (1) ◽  
pp. 64-77
Author(s):  
Alexandra Posza
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Real Option ◽  
Evaluation Method ◽  
Growth Potential ◽  
Capital Investments ◽  
Discounted Cash Flow ◽  
Venture Capital Investment ◽  
High Degree ◽  
Venture Capital Investments

Venture capital investments play an important role in the development and growth of start-up companies that are characterized by a high degree of uncertainty and growth potential, and venture capital is also one of the major sources of financing for entrepreneurial businesses. In the case of venture capital investment, staging has a huge potential, so the venture capitalists keep the right to participate in further financing rounds. The real option approach as an evaluation method provides an opportunity to evaluate this kind of investment with the help of flexibility in the case of a high degree of uncertainty. The paper puts the emphasis on the evaluation and the effectiveness of venture capital investments primarily from the aspect of real option theory tested on Hungarian venture capital cases. The paper concludes that the option-based valuation methods are more suitable for evaluating venture capital investments than others, especially the discounted cash flow method.

scholarly journals Sustainable Profit versus Unsustainable Growth: Are Venture Capital Investments and Governmental Support Medicines or Poisons?

2020 ◽  
Vol 12 (18) ◽  
pp. 7773
Author(s):  
Moon Young Kang
Keyword(s):  
Venture Capital ◽  
Large Scale ◽  
Academic Research ◽  
Sustainable Growth ◽  
Capital Investments ◽  
Data Accessibility ◽  
Growth And Survival ◽  
Firm Profitability ◽  
Governmental Support ◽  
Venture Capital Investments

Considering that startups greatly contribute to the economic development and survival of a country through economic growth and job creation, it is necessary to investigate the profitability of startups. However, research on this issue has not been developed enough as most previous studies regarding firm profitability were based on large-scale public companies with relatively easy data accessibility, not on startups. In addition, it is meaningful to empirically prove whether venture capital investments and governmental support positively impact on the sustainability of startups as huge discrepancies exist between traditional academic research and recent practices. Findings from this study, based on data analytics, are expected to fill the gap in knowledge as it is not clearly known about firm profitability of startups for their sustainable growth and survival. Focusing on startup profitability, the main objective of this research is to provide significant theoretical contributions and practical guidelines for startup entrepreneurs, investors, and policymakers to avoid unsubstantial growth and find solutions for sustainable growth and survival. To properly and completely analyze the determinants of firm profitability of startups, this research used the 2018 and 2019 Survey of Korean Startups by the Ministry of SMEs and Startups of Korea and Korea Venture Business Association with over 3000 samples.

Venture Capital Investment in Orthopaedics: Has the Landscape Changed over the Past Two Decades (2000–2019)?

2021 ◽  
pp. 155335062110310
Author(s):  
Thomas B. Cwalina ◽  
Tarun K. Jella ◽  
Alexander J. Acuña ◽  
Linsen T. Samuel ◽  
Atul F. Kamath
Keyword(s):  
Venture Capital ◽  
Capital Investment ◽  
Third Party ◽  
Annual Growth Rate ◽  
Capital Investments ◽  
Compound Annual Growth Rate ◽  
Venture Capital Investment ◽  
The Past ◽  
Dollar Amount ◽  
Venture Capital Investments

Background. Innovations in orthopaedic technologies often require significant funding. Although an increasing trend has been observed for third-party investments in other medical fields, no study has examined the influence of venture capital (VC) funding in orthopaedics. Therefore, this study analyzed trends in VC investments related to the field of orthopaedic surgery, as well as the characteristics of recipients of these investments. Methods. Venture capital investments into orthopaedic-related businesses were reviewed from 2000 to 2019 using Capital IQ, a proprietary intelligence platform documenting financial investments. Metrics categorized were investments by year, investment amount, and subspecialty domain as per the American Academy Orthopaedic Surgeons website. The compound annual growth rate (CAGR) for both quantity and dollar amount of investments was calculated over the study period and the two decade-long periods (2000–2009 and 2010–2019). Results. Over two decades, 673 VC investments took place, involving a total of US$3.5 billion. Both the number and dollar value of investments were greater in the second decade (440, US$1.9 billion), compared to the first decade (233, US$1.6 billion). Both quantity and dollar amount of VC investments grew over the first decade, with a CAGR 9.53% and 4.97%, respectively. However, investment growth declined in the latter decade. The largest and most frequent investments took place within spine surgery and adult reconstruction. Conclusion. An initially rising trend in VC investment in orthopaedic-related businesses may have plateaued over the past decade. These findings may have important implications for continued investment into orthopaedic innovations and collaboration between the surgical community and private sector.

Management of Innovative Projects Involving Venture Capital Investments

10.12737/2936 ◽  
2014 ◽  
Vol 3 (1) ◽  
pp. 26-36
Author(s):  
������ ◽  
Aleksandr Dagaev
Keyword(s):  
High Risk ◽  
Venture Capital ◽  
Capital Investment ◽  
Capital Investments ◽  
Wide Spread ◽  
Venture Capital Investment ◽  
Innovative Process ◽  
Venture Capital Investments ◽  
End Results

The paper is devoted to considering of some problems related to high risk innovative projects management. These problems are a consequence of uncertainty inherent in innovations with realization terms, needs for resource providing and even with the end results of carried-out projects. The specified reasons demand use of non-standard approaches to project management, considering specifics of innovative process. Some of such approaches wide-spread in a practice of venture capital investment are discussed.

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 Internationalisation and localisation: Foreign venture capital investments in the United Kingdom

2020 ◽  
Vol 35 (3) ◽  
pp. 230-256 ◽  
Author(s):  
Richard T Harrison ◽  
Babangida Yohanna ◽  
Yannis Pierrakis
Keyword(s):  
Economic Development ◽  
Venture Capital ◽  
Capital Investment ◽  
Turn Of The Century ◽  
Capital Investments ◽  
Venture Capital Investment ◽  
The United Kingdom ◽  
The Uk ◽  
Economic Regions ◽  
Venture Capital Investments

Venture capital plays a significant role in economic development through the emergence of new firms, technologies, industries and markets. This role, however, is associated with systemic uneven development regionally as both the supply of venture capital and the investment in new and growing ventures is highly concentrated regionally in the core economic regions of a country. Over the past decade, this intra-national regional concentration has been accompanied by an increasing internationalisation of the venture capital industry, as cross-border investment becomes more significant. In this paper, we explore the implications of this internationalisation for regional economic development in the UK. We conclude that the geography of venture capital in the UK has been shaped since the turn of the century by a significant increase in venture capital investments made by foreign funds, mainly in the form of co-investments with local funds. These foreign venture capital investments are primarily concentrated in London, Southeast England and East of England, which collectively attracted 82.5% of all foreign venture capital investments made to UK companies in 2017, strongly reinforcing the existing spatial concentration of venture capital investment. The paper concludes by questioning whether this increased dependency of these regions on foreign venture capital matters to regional development and draws out some of the implications for public policy.

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

2015 ◽  
Vol 15 (2) ◽  
pp. 685-708 ◽  
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.

scholarly journals Assessing the Efficiency of Venture Capital Functioning in the Transforming Economy in UAE and China by a Mathematical Model

SAGE Open ◽  
2022 ◽  
Vol 12 (1) ◽  
pp. 215824402110684
Author(s):  
Husam Wahdan ◽  
Zeng Rui Tian
Keyword(s):  
Mathematical Model ◽  
Venture Capital ◽  
Capital Investment ◽  
Production Efficiency ◽  
Developing Economies ◽  
Industrial Society ◽  
Capital Investments ◽  
Chinese Market ◽  
Venture Capital Investment ◽  
Venture Capital Investments

This article examines the evolution of approaches to the content of venture capital based on the evolution of venture capital and venture capital investment, post-industrial society, institutional theory, and experience of forming the venture capital market in developing economies. Hypotheses of the functioning of venture capital in the transforming economy of the UAE and China are proposed and tested. An economical and mathematical model for assessing the efficiency of venture capital functioning has been developed. It was found that there is a particular relationship between the national characteristics of the country’s venture capital industry and the capital invested in innovative industries, as well as the production efficiency of these industries. Moreover, the attractiveness of venture capital investments somehow increases with investments in other sectors in both countries. Since the Chinese market evolved earlier than UAE, it has the most remarkable characteristics, including higher capital workforce ratios and higher exports of science and technology-intensive products. In addition, the Chinese market has a high level of development and focuses on a sustainable financing cycle than UAE.

scholarly journals Cross-Border Venture Capital Investments: What Is the Role of Public Policy?

2019 ◽  
Vol 12 (3) ◽  
pp. 112 ◽  
Author(s):  
Bradley ◽  
Duruflé ◽  
Hellmann ◽  
Wilson
Keyword(s):  
Venture Capital ◽  
High Growth ◽  
Policy Framework ◽  
Capital Investments ◽  
Innovation Ecosystem ◽  
Foreign Investors ◽  
Cross Border ◽  
The One ◽  
Venture Capital Investments

(1) Background: Cross-border venture capital (VC) investments play an important role in the scaling up of high-growth companies. However, policymakers worry that foreign VC investments transfer the majority of economic activity to the investor country. On the one hand, start-ups welcome the foreign capital, expertise, and networks that accompany cross-border investments. On the other hand, policymakers are concerned that cross-border investments predominantly benefit foreign economies and fail to develop the local entrepreneurial ecosystem. This paper describes a framework for how policymakers can develop a set of policies toward cross-border VC investments. (2) Methods: The paper examines available data and trends about the role of cross-border investing, focusing on Europe, Israel, and Canada. Then, the paper explains the underlying economic challenges and develops a policy framework. (3) Results: The analysis shows that in addition to policies that aim to attract foreign investors, there are also important policies for the development of the domestic VC market. The analysis encompasses policies that are both financial and non-financial in nature. (4) Conclusions: A core insight for policymakers is to retain a balance of initiatives, attracting foreign investors while simultaneously making sure to strengthen the country’s domestic VC industry and innovation ecosystem. The mix of policies will adjust as the domestic ecosystem matures.

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