Entrepreneurship & Finance eJournal最新文献

{"title":"Venture Capital Backing, Investor Attention, and Initial Public Offerings","authors":"Thomas J. Chemmanur, K. Krishnan, Qianqian Yu","doi":"10.2139/ssrn.2851196","DOIUrl":"https://doi.org/10.2139/ssrn.2851196","url":null,"abstract":"We propose and empirically analyze a new channel through which venture capitalists (VCs) may add value at IPO to the private firms that they invest in. We hypothesize that the IPOs of VC-backed firms garner greater “investor attention” (in the sense of Merton (1987)), allowing the IPO underwriters of such firms to perform two information-related roles more efficiently during the IPO book-building and road-show process: information dissemination, where the lead underwriter disseminates noisy information about various aspects of the IPO firm to institutional investors; and information extraction, where the lead underwriter extracts information useful in pricing the IPO firm equity from institutional investors. Based on this investor attention channel, we develop and test several implications for the IPO characteristics of VC-backed firms. We use a hand-collected dataset of pre-IPO media coverage as a proxy for investor attention in our empirical analysis. Our results are summarized as follows. First, IPOs of VC-backed firms attract greater investor attention than those of non-VC-backed firms; further, while the IPOs of both high- and low-reputation VC-backed firms attract greater investor attention than those of non-VC-backed firms, the IPOs of high-reputation VC-backed firms attract greater investor attention than those of low-reputation VC-backed firms. Second, VC-backed firms are associated with larger absolute values of IPO offer price revisions, greater IPO and after-market valuations, larger IPO initial returns, greater institutional investor equity holdings, and greater analyst coverage post-IPO. Our interaction tests reveal that, even after controlling for the direct effect of VC-backing, there is an incremental positive effect of higher investor attention received by VC-backed firms on various IPO characteristics. Our dynamic analysis of IPO firm valuation in the three years post-IPO shows that the valuation of VC-backed firms falls to a greater extent than those of non-VC-backed firms corresponding to investor attention fading with time, with the valuation of firms that received the greatest investor attention at IPO falling to the greatest extent. Our instrumental variable analysis shows that the positive relation we document between VC-backing, investor attention, and various IPO characteristics is causal.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73444655","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Catering Innovation: Entrepreneurship and the Acquisition Market","authors":"Xinxin Wang","doi":"10.2139/ssrn.3247274","DOIUrl":"https://doi.org/10.2139/ssrn.3247274","url":null,"abstract":"Start-up entrepreneurs depend on M&A markets to exit VC investments. I test a novel catering theory of innovation: Does the market structure of potential acquirers impact entrepreneurial decision-making? Using CrunchBase and LinkedIn data, I find that a standard deviation increase in acquirer market concentration decreases the propensity to become an entrepreneur by 4%, suggesting that fragmented markets are appealing entry markets. Likewise, a standard deviation increase in acquirer concentration increases the catering of entrepreneurs by 9%, as measured by technological overlap with potential acquirers. Catering comes at the cost of breakthrough innovation (16% decrease), the key determinant of economic growth.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82422694","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Fintech Venture Capital","authors":"Douglas J. Cumming, Armin Schwienbacher","doi":"10.1111/corg.12256","DOIUrl":"https://doi.org/10.1111/corg.12256","url":null,"abstract":"We document a notable change in the pattern of fintech VC investments around the world relative to other types of investments after the global financial crisis. We argue that the spike in fintech VC in certain countries is attributable to differential enforcement of financial institution rules amongst start-ups versus large established financial institutions after the financial crisis. Consistent with this regulatory arbitrage view, we show the marked increase in fintech is more pronounced in countries without a major financial center. Also, we show the fintech boom is more pronounced for smaller private limited partnership VCs that likely have less experience with prior VC booms and busts. These fintech VC deals are less likely to be successfully exited as IPOs and acquisitions, and substantially more likely to be liquidated, especially when located in countries without a major financial center.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78157654","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"From Inactivity to Full Enforcement. The Implementation of the 'Do No Harm' Approach in Initial Coin Offerings","authors":"Marco Dell’Erba","doi":"10.2139/ssrn.3194863","DOIUrl":"https://doi.org/10.2139/ssrn.3194863","url":null,"abstract":"This Article analyzes the way the Securities and Exchange Commission (SEC) has enforced securities laws with regard to Initial Coin Offerings (ICOs). In a speech held in 2016, the U.S. Commodities Futures Trading Commission (CFTC) Chairman Christopher Giancarlo emphasized the similarities between the advent of the blockchain technology and the internet era, and referred to the “do no harm” approach as the best way to regulate blockchain technology. The “do no harm” approach was implemented in the 1990s’ by the Clinton administration at the beginning of the Internet Era, when regulators fully supported technological innovations without stifling them with burdensome rules. \u0000 \u0000The Article suggests that the SEC adopted a “do no harm approach” and successfully pursued two of its fundamental institutional goals when enforcing securities laws in the context of ICOs: investor protection and preservation of capital formation. After providing a brief description of the basics of ICOs and the way they evolved in the last two years, this Article examines the stages of the transition towards the new phase of full enforcement action implemented by the SEC. The shift from inactivity to enforcement was gradual, characterized by clearly identifiable steps. Data on ICOs demonstrates that this rigorous enforcement of securities laws has not damaged the industry in the U.S. and may suggest that entrepreneurs have adapted to this enforcement approach. By contrast, a lack of enforcement would probably have increased uncertainty to the detriment of investors and entrepreneurs and put the U.S. at a disadvantage in the international arena. Furthermore, the paper emphasizes the importance to pursue specific goals in the short-to-medium term, in particular to make securities regulation uniform and avoid differences at the state and federal levels, and to encourage industry authorities such as Self-Regulatory Organizations (SROs) to develop high standards for self-regulation.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78643570","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Are Biotechnology Startups Different?","authors":"H. Lebret","doi":"10.2139/SSRN.3161914","DOIUrl":"https://doi.org/10.2139/SSRN.3161914","url":null,"abstract":"In the domain of technology startups, biotechnology has often been considered as specific. Their unique technology content, the type of founders and managers they have, the amount of venture capital they raise, the time it takes them to reach an exit as well as the technology clusters they belong to are seen as such unique features. Based on extensive research from new databases, the author claims that the biotechnology startups are not as different as it might have been claimed: the amount of venture capital raised, the time to exit, their geography are indeed similar and even their equity structure to founders and managers have similarities. The differences still exist, for example the experience of the founders, the revenue and profit level at exit.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-04-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90554422","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Understanding Informal Financing","authors":"Franklin Allen, Meijun Qian, Jing Xie","doi":"10.2139/ssrn.3369996","DOIUrl":"https://doi.org/10.2139/ssrn.3369996","url":null,"abstract":"This paper offers a framework to understand informal financing based on mechanisms to deal with asymmetric information and enforcement. We find that constructive informal financing such as trade credits and family borrowing that relies on information advantages or an altruistic relationship is associated with good firm performance. Underground financing such as money lenders who use violence for enforcement is not. Constructive informal financing is prevalent in regions where access to bank loans is extensive, while its role in supporting firm growth decreases with bank loan availability. International comparisons show that China is not an outlier but rather average in using informal financing.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79708336","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"A Study on Financial Performance Evaluation of Small Scale Industries: Impact and Issues","authors":"S. Banik","doi":"10.2139/ssrn.3162522","DOIUrl":"https://doi.org/10.2139/ssrn.3162522","url":null,"abstract":"Small scale industries either are known as SSI or generally as the Small and Medium enterprises refer to those small entrepreneurs who are engaged in production, manufacturing or service at a micro scale. Small scale industries play a focal role in the economic and social development of India in the post-independence era. Small scale industries constitute the backbone of a developing economy with its effective, efficient, flexible and innovative entrepreneurial spirit. Round the world SSI units have been accepted originator of economic growth and for promoting equitable development. The contribution of SSIs to the Indian economy in terms of employment generation, reducing regional imbalances, promoting inter-sectorial linkages, magnifying exports and fostering equitable economic growth potential has been quite marvellous. This sector through more than 6000 products ranging from traditional to high-tech, consisting over 36 million units widely dispersed across the country provides employment to over 80 million persons, contributes about 8% to country's GDP besides accounting for 45% of manufactured output and 40% to the export from the country. The SSI sector has the perspective to spread industrial growth around the country and can be a considerable associate in the progress of comprehensive growth. The target of proposed National Manufacturing Policy of enhancing the share of manufacturing sector in GDP to 25% and to create 100 million jobs by end of 2022, as well as to take India from its present 2 trillion dollar economy to 20 trillion dollar economy can be achieved with the help of SSI units. [1] Most of the SSI units don't care about their financial position, they only run business, mostly focus on cash receipt and what their bank account position is. Accounting and financial evaluation have always been seen as the best route to a successful business career as it is considered as the language and basic tool of a business organization which helps to determine how a business is doing. The growth of the small-scale enterprises can be determined through maintenance of proper records of accounts, which provides the basis for safeguarding and controlling the business properties. We found that there are many perceived factors affecting their adoption of accounting practices and their effects on their business operations in the area. Among such factors include; lack of adequate training, wilful misconduct, and negligence. This article presents an empirical investigation of financial performance evaluation practised by SSIs and its impact.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-03-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85776766","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"VCs as Intermediaries in IPO and Trade Sale Exits: Evidence from Industry-Level Analysis in Europe and the U.S.","authors":"Julius Tennert, Alexander Steeb","doi":"10.2139/ssrn.3138505","DOIUrl":"https://doi.org/10.2139/ssrn.3138505","url":null,"abstract":"We examine the role of the VC as an intermediary between the portfolio firm and the new investors in the exit phase. To improve the understanding of VC’s role as a certifying agent, we model exit outcomes on an industry level. We do so, to analyze the VC’s role for the different exit conditions in the different industries. We find that the need for certification by the VC is conditional on the exit conditions within an industry and that certification by the VC is more important to exit to an IPO in industries with high IPO rates. The result indicates that VCs need to signal their ability as strong intermediaries to successfully exit their portfolio firms to an IPO if IPO investors face severe search and screening costs.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80615515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Credit Environment and Small Business Dynamics: Evidence from Establishment-Level Data","authors":"Chen Lin, Mingzhu Tai, Wensi Xie","doi":"10.2139/ssrn.3133092","DOIUrl":"https://doi.org/10.2139/ssrn.3133092","url":null,"abstract":"\u0000 We evaluate how a positive, technology-driven shock to bank liquidity affects small business dynamics across different size distributions. We first show that banks receiving positive liquidity shocks increase lending to relatively larger SMEs, not to the smallest firms. This finding is consistent with the view that a positive liquidity shock enhances bank charter values, thereby reducing risk-taking incentives. Moreover, such disproportionate credit allocation leads to a crowding-out effect on micro firms. When larger SMEs grow faster and exit less because of better access to credit, their expansion stifles the development of micro firms, whose access to credit remains unchanged.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-02-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74296689","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Applications of Blockchain Technology in Crowdfunding Contract","authors":"Hongjiang Zhao, C. Coffie","doi":"10.2139/ssrn.3133176","DOIUrl":"https://doi.org/10.2139/ssrn.3133176","url":null,"abstract":"At present, Crowdfunding source of raising funds typically for business startups has gained much primacy with most businesses resorting to the use of Crowdfunding platforms to raise funds because it is relatively inexpensive and uncomplicated in nature. The call for a solution to issues related to security, investor abuse and, illegal transactions that could plague crowdfunding contracts is the spurred this paper. Using existing literature on Crowdfunding and blockchain technology, we put forward a conceptual framework that can provide the solution to the problems related to Crowdfunding contracts through the use of blockchain technology. Taking into account the role of the intermediary platforms, we examine how the foundational qualities of the blockchain technology may resolve the problems of these platforms. We discuss how blockchain technology can effectively and securely handle the relationship between fundraisers, platforms and the investors. We anticipate that our paper will drive the attention of researchers to delve into blockchain technology in Crowdfunding contracts practicality.","PeriodicalId":11881,"journal":{"name":"Entrepreneurship & Finance eJournal","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2018-01-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88955415","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}