scholarly journals An Empirical Analysis of Underpricing and Oversubscription between Venture-Backed IPO and Non-Venture-Backed IPO in Italy

2019 ◽  
Vol 12 (4) ◽  
pp. 143 ◽  
Author(s):  
Maurizio Rija
Keyword(s):  
Stock Market ◽  
Venture Capital ◽  
Empirical Analysis ◽  
Private Equity ◽  
Venture Capitalist ◽  
Information Asymmetries ◽  
Anglo Saxon ◽  
Economic Literature ◽  
Risk Capital ◽  
Institutional Investment

Over the years, in order to meet the financial needs of companies, new forms of financing alternative to the traditional banking channel have been developed. These include the institutional investment in risk capital, which is defined by the terms Anglo-Saxon venture capital and private equity. In this empirical analysis, the divestment of the venture capitalist's participation will be emphasized by listing the invested companies in the stock market, a channel not widely used in Italy, but highly desired because of the various benefits it can bring. Analyzing the IPOs that were carried out in Italy on the main list from 2007 to 2017, we will verify what is described in the economic literature, which is that a venture capitalist, by performing a certification role, is able to reduce the information asymmetries presented in the listing process and, as a result, contain underpricing and improve oversubscription. By using the presence of a venture capitalist within the venture capital as the only variable, it has been observed that on average the underpricing and oversubscription of the venture-backed IPOs slightly differentiate from the non-venture-backed IPOs. However, the study carried out shows that this difference, although not significant, turns out to be very interesting.

scholarly journals Is a Company’s Access to Private Equity and Venture Capital Affected by Location or Management Diversity? Some Empirical Evidence from Austria

2018 ◽  
Vol 13 (7) ◽  
pp. 45
Author(s):  
Sascha Sardadvar
Keyword(s):  
Propensity Score ◽  
Venture Capital ◽  
Private Equity ◽  
Risk Capital ◽  
Or Management ◽  
Private Investments ◽  
The World ◽  
Firm Data ◽  
Negative Impacts ◽  
Econometric Analyses

Governments around the world are providing various forms of subsidies to promote private investments into young, innovative firms. Under these circumstances it becomes ever more important to identify possible imbalances of risk capital (i.e. private equity and/or venture capital) markets. The present study provides econometric analyses (propensity score matching and probit regressions) based on firm data with the estimations displaying some distortions. In particular, a location outside Vienna as well as its shares of female and foreign managers display negative impacts on a company’s likelihood to be risk financed.

RISK MANAGEMENT IN PRIVATE EQUITY FUNDS: A COMPARATIVE STUDY OF INDIAN AND FRANCO-GERMAN FUNDS

2006 ◽  
Vol 11 (01) ◽  
pp. 35-55 ◽  
Author(s):  
CAN KUT ◽  
JAN SMOLARSKI
Keyword(s):  
Risk Management ◽  
High Risk ◽  
Private Equity ◽  
Venture Capitalist ◽  
Anglo Saxon ◽  
Public Enterprises ◽  
Equity Funds ◽  
Private Equity Funds ◽  
The Many ◽  
Management Preferences

Venture capitalist and buy-out funds are often considered experts at investing in high-risk projects and companies. To be successful investors, private equity funds must therefore manage the many aspects of risk that are associated with investing in non-public enterprises. This study examines how Indian private equity funds manage several dimensions of risk in comparison to non-Anglo-Saxon funds. We analyze risk management preferences in Indian and Franco-German funds in pre- and post-investment stages. The results, which are discussed in detail, show significant differences between the two groups.

Peer Monitoring, Syndication, and the Dynamics of Venture Capital Interactions: Theory and Evidence

2019 ◽  
Vol 55 (6) ◽  
pp. 1875-1914 ◽  
Author(s):  
Onur Bayar ◽  
Thomas J. Chemmanur ◽  
Xuan Tian
Keyword(s):  
Theoretical Model ◽  
Venture Capital ◽  
Moral Hazard ◽  
Empirical Analysis ◽  
Venture Capitalist ◽  
Value Addition ◽  
Peer Monitoring ◽  
Moral Hazard Problem ◽  
Model Predictions

We develop a theoretical model providing a new rationale for venture capitalist (VC) syndicate formation and empirically test our model predictions. An entrepreneur obtains financing and two different value-adding inputs from a single VC or from two different VCs, each operating in his area of expertise. We characterize the entrepreneur’s equilibrium choice between contracting with a single VC, individually with multiple VCs, or with a VC syndicate. We show that syndicates mitigate VCs’ moral hazard problem in value addition. We also analyze the dynamics of VC syndicate composition. The results of our empirical analysis are consistent with our model’s predictions.

Antecedents of Stage-wise Investment Preferences of Venture Capital and Private Equity Firms in India: An Empirical Exploration

2021 ◽  
pp. 097265272110229
Author(s):  
Poonam Dugar ◽  
Rakesh Basant
Keyword(s):  
Venture Capital ◽  
Empirical Analysis ◽  
Private Equity ◽  
Early Stage ◽  
Jel Classification ◽  
Specific Investment ◽  
Entrepreneurial Ecosystems ◽  
Firm Type ◽  
Investment Size ◽  
Investment Choices

This article is a maiden attempt at exploring determinants of stage-specific investment choices of Indian venture capital and private equity (VCPE) firms. Analysis of 5,782 VCPE investment deals during 1998–2016 shows that firms’ preferences to invest in various stages (early vs. late) are significantly affected by the characteristics of the VCPE firms, features of the deal, and characteristics of the investee firms. More specifically, experience and ownership (foreign vs. domestic) of VCPE firm, type of deal (syndicated or otherwise), investment size of the deal, and location and industry of the investee firm influence the stage of investment. Detailed empirical analysis shows that younger VCPE firms and those with domestic investors prefer to invest in early stages, presumably because they wish to build a reputation and also leverage their proximity with investee firms to manage high market and technological risks associated with early-stage investments. Syndication is another mechanism used to manage the risks associated with early-stage deals. Investee firms in industries that have lower investment requirements or shorter gestation periods and those located in regions with a mature entrepreneurial ecosystems are more likely to attract early-stage investments. JEL Classification: G24, L26, D81

scholarly journals The effects of investor protection on the venture capital industry

2007 ◽  
Vol 4 (2) ◽  
pp. 181-191
Author(s):  
Luis J. Sanz
Keyword(s):  
Stock Market ◽  
Venture Capital ◽  
Investor Protection ◽  
Venture Capitalist ◽  
The U.S

In this model the level of investor protection shapes both the investment and exit policies of the venture capitalist. It therefore might help to explain the correlation between the development of both the venture capital industry and the stock market across countries, as well as some of the differences between the venture capital industry in Europe and in the U.S.

Venture Capital, Angel Capital, and Other Finance, IPOs, and Acquisitions

2021 ◽  
pp. 353-369
Author(s):  
Lin Lin
Keyword(s):  
Stock Market ◽  
Mergers And Acquisitions ◽  
Venture Capital ◽  
Initial Public Offerings ◽  
Capital Market ◽  
Private Equity ◽  
Small Enterprises ◽  
Access To Finance ◽  
Entrepreneurial Ventures ◽  
Public Offerings

This chapter focuses on the development of non-bank financial institutions, particularly venture capital (VC), angel capital, private equity, and foreign funds, and their role in funding entrepreneurial ventures in China. It discusses the development of the venture capital market and the evolution of domestic and foreign funds in China. It examines the exits of VC-backed companies through initial public offerings (IPOs) and mergers and acquisitions and explores the connection between the stock market and VC market in China. It also evaluates recent institutional improvements and regulatory reforms for facilitating access to finance for small enterprises in China, especially the recent reforms to the stock market.

Die angelsächsische Achse

2013 ◽  
Vol 57 (1-2) ◽  
Author(s):  
Christoph Scheuplein
Keyword(s):  
Venture Capital ◽  
Private Equity ◽  
Empirical Studies ◽  
Special Focus ◽  
Anglo Saxon ◽  
Frankfurt Am Main ◽  
Equity Investment ◽  
Equal Importance ◽  
The Usa ◽  
The Uk

The Anglo-Saxon axis. An empirical analysis of buy-outs and location structures of private equity firms in Germany. The current research suggests that equity investment firms in Germany are concentrated in five or six regional centres of equal importance. While the theoretical discussion focuses primarily on venture capital, empirical studies on locations of venture capital and buy-outs usually make no explicit distinction between the two forms of investment. The analysis presented here makes a systematic distinction between venture capital and buy-outs, with a special focus on buy-outs because this form of investment is of greater economic importance. The paper also extends the range of available data by including data on company transactions. An evaluation of all buy-outs in Germany in 2012 indicates that Munich is the only major location of buy-out firms in Germany, apart from Frankfurt am Main. The branch offices of equity investment firms based in the USA and the United Kingdom (UK) are a crucial factor. Moreover, many private equity firms operate directly from outside Germany, particularly from London. Thus, one might speak of an Anglo-Saxon axis of buy-out firms. These firms have a significant competitive advantage due to better fundraising opportunities in the financialised economies of the USA and the UK. Therefore, it is argued that, rather than focusing exclusively on the regional capital supply to explain the infrastructure of equity investment firms, as it was done in the past, the research should also take the organization of sources of funds into consideration.

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