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

IF 1.2 Q3 BUSINESS, FINANCE

Journal of Emerging Market Finance Pub Date : 2021-07-12 DOI:10.1177/09726527211022900

Poonam Dugar, R. Basant

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引用次数: 3

Abstract

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

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印度风险投资和私募股权公司阶段投资偏好的前因:实证探索

本文是探索印度风险投资和私募股权(VCPE)公司特定阶段投资选择的决定因素的首次尝试。对1998-2016年间5782笔VCPE投资交易的分析表明，公司在不同阶段(早期或晚期)的投资偏好受到VCPE公司特征、交易特征和被投资公司特征的显著影响。更具体地说，VCPE公司的经验和所有权(国外还是国内)，交易类型(银团或其他)，交易的投资规模，以及被投资公司的位置和行业都会影响投资阶段。详细的实证分析表明，较年轻的VCPE公司和那些有国内投资者的公司更喜欢在早期阶段进行投资，可能是因为他们希望建立声誉，并利用他们与被投资公司的接近程度来管理与早期投资相关的高市场和技术风险。辛迪加是另一种用于管理与早期交易相关风险的机制。投资要求较低或酝酿期较短的行业以及位于成熟创业生态系统地区的被投资企业更有可能吸引到早期投资。JEL分类:G24, L26, D81

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来源期刊

Journal of Emerging Market Finance BUSINESS, FINANCE-

CiteScore

1.80

自引率

33.30%

发文量

期刊介绍： The Journal of Emerging Market Finance is a forum for debate and discussion on the theory and practice of finance in emerging markets. While the emphasis is on articles that are of practical significance, the journal also covers theoretical and conceptual aspects relating to emerging financial markets. Peer-reviewed, the journal is equally useful to practitioners and to banking and investment companies as to scholars.