ERPN: Venture Capital (Sub-Topic)最新文献

{"title":"Heterogeneous Venture Capitalists and Syndicate Switching","authors":"Suting Hong, Pierre Mella-Barral","doi":"10.2139/ssrn.3895597","DOIUrl":"https://doi.org/10.2139/ssrn.3895597","url":null,"abstract":"In early round investments by venture capital syndicates, the venture capitalists (VCs) which compose the syndicate often have very different levels of experience. In later round VC syndicates, often no VC from the earlier round syndicate is present. We show that a theory of informational hold-up by the incumbent syndicate can relate and explain these two observations. Consistent with the theory, we find empirically that the heterogeneity in experience of VC syndicate partners is (i) negatively related to the extent to which outside VCs trust in the entrepreneur and (ii) positively related to the likelihood of syndicate switching in a later round.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125589766","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":"How Unique is VC’s American History?","authors":"Arthur Korteweg, Berk A. Sensoy","doi":"10.2139/ssrn.3858751","DOIUrl":"https://doi.org/10.2139/ssrn.3858751","url":null,"abstract":"VC: An American History, by Tom Nicholas, offers a compelling chronicle of the development of professional venture capital (VC) in the United States—from VC-like fore-bearers as diverse as eighteenth-century cotton manufacturing and nineteenth-century whaling up to the state of the modern VC market at the turn of the millennium. The book emphasizes America’s enduring advantage in VC as a consequence of these early developments and as a practical governance solution for investing in the long-tailed returns of risky new ventures. In this essay we discuss similar historical precedent and governance arrangements in the spice-trading voyages of the sixteenth- and seventeenth-century Dutch Republic, calling into question the uniqueness of early American VC ancestors. Moreover, far from being a distinguishing feature of early ventures, long-tailed returns exist even in public equities, suggesting that the VC governance structure is about more than the distribution of returns. We conclude that the reasons for American dominance of contemporary VC remain unclear. Picking up where the book leaves off, we summarize facts and trends in twenty-first-century VC. (JEL G24, M13, N20, O16, O31)","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"68 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-06-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122161094","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":"ICO versus Credit versus Venture Capital Financing under Stochastic Demand: A comment on 'Entrepreneurial Incentives and the Role of Initial Coin Offerings' by Rodney Garratt and Maarten van Oordt","authors":"L. Schilling","doi":"10.2139/ssrn.3850973","DOIUrl":"https://doi.org/10.2139/ssrn.3850973","url":null,"abstract":"The article 'Entrepreneurial Incentives and the Role of Initial Coin Offerings' by Garratt and van Oordt revisits a classical principal-agent problem in corporate finance: How do financing choices of firms and the according firm ownership structure impact effort choices of the management and therefore firm value? Garratt and Oordt extend this classic discussion by analyzing initial coin offerings (ICOs) as a startup financing instrument in contrast to classic financing instruments such as debt, (entrepreneurial) equity and venture capital.<br><br>Their paper shows, depending on the firm's characteristics, ICO financing can align the entrepreneur's incentives with those of his investors better or worse, in comparison to venture capital and debt financing. Therefore, the novel ICO financing instrument is a valuable alternative to credit and venture capital also from a social perspective.<br><br>I find the efficiency comparison of financing choices for entrepreneurial incentives to be a very interesting and important contribution. In this discussion, I shed light on this topic from a different angle. Garratt and van Oordt base their analysis on the simplifying assumption that demand for the platform product realizes once and for all in t=1. This allows Garratt and van Oordt to abstract from token-exchange rate risk. Here, instead, I will allow platform demand to evolve stochastically across time. Moreover, unlike in Garratt and van Oordt, I analyze the general case where not necessarily all tokens are sold in the market at every point in time. Instead, there can exist token speculation where investors hold on to tokens for a certain period of time, effectively reducing the token supply, or additional tokens can be mined by the entrepreneur, which increases the token supply, even though the latter activity might constitute a breach of contract.<br><br>By allowing the token supply and product demand to fluctuate across time, the token exchange rate becomes stochastic, causing exchange rate risk to the ICO investors, the entrepreneur, and platform retailers.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"197 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122028352","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":"Negative Central Bank Rates and Venture Capital Markets","authors":"C. Bellavitis, Christian Fisch, S. Vismara","doi":"10.2139/ssrn.3838267","DOIUrl":"https://doi.org/10.2139/ssrn.3838267","url":null,"abstract":"We assess the impact of negative central bank interest rates on venture capital (VC) markets. Using data from 32 countries from 2004 to 2019, we find that interest rates have a significant effect on the functioning of VC markets. Higher interest rates are associated with higher demand for venture capital by entrepreneurs and higher fundraising activity of VC firms. However, although entrepreneurs’ demand is lower when interest rates become negative, the fund-raising activity of VC firms increases. We explain this counterintuitive finding by referring to the principal-agent relationship between general and limited partners of VC firms in combination with behavioral finance arguments. The effect of negative interest rates loses strength over time, which suggests that negative interest rates might eventually become the “new normal”.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"191 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-05-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115704965","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":"How Venture Capitalists Bet: Evidence from Two Randomized Controlled Trials","authors":"Ye Zhang","doi":"10.2139/ssrn.3724424","DOIUrl":"https://doi.org/10.2139/ssrn.3724424","url":null,"abstract":"Understanding the importance of both human and non-human assets in firms' early-stage financing process is crucial to examining theories of the firm. However, it is difficult to empirically generate causal evidence due to data limitations and the lack of exogenous variations. This paper uses two randomized controlled trials with real venture capitalists mainly from the U.S. to identify characteristics of both the project and their teams that causally affect venture capitalist funding. Specifically, I also check their relative importance on investors' decisions. I find that multiple team characteristics (i.e. founder's educational background and previous entrepreneurial experiences) and project characteristics (i.e. traction, business model, location, comparative advantages, etc.) causally affect investors’ contact and investment interests by influencing their evaluation of startups' potential financial returns, risk, and loyalty. Although project traction matters the most in my experimental setting, it is fundamentally the investors' belief in the startup’s profitability that matters the most. I also find the traditional correspondence test method, to an extent, inappropriate in testing the significance of project characteristics in virtue of the different \"signal-to-noise ratio\" problem.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131281991","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":"Pay for Performance, Partnership Success, and the Internal Organization of Venture Capital Firms","authors":"Karan Bhanot","doi":"10.2139/ssrn.3699555","DOIUrl":"https://doi.org/10.2139/ssrn.3699555","url":null,"abstract":"We show how the structure of partner incentives and the decision processes within a venture capital firm contribute to fund performance, partner retention and partnership success. Optimal capital allocation during staged financing requires that partner incentives encourage cooperation by linking a partner’s compensation to the return on the entire fund rather than return on the investment sponsored by an individual partner. Incentives for individual performance of senior partners are optimally provisioned by a higher profit share in a subsequent fund. For junior partners with lower profit shares, partner pay may be linked to performance of current individually sponsored deals. Our paper provides an economic underpinning to empirical observations about the internal organization of venture capital firms.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"374 1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132808048","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":"Friends Don’t Lie: Monitoring and Communication With Risky Investments","authors":"Snehal Banerjee, M. Szydlowski","doi":"10.2139/ssrn.3660043","DOIUrl":"https://doi.org/10.2139/ssrn.3660043","url":null,"abstract":"Venture capital (VC) investors have been criticized for lax monitoring and for be- ing too “founder-friendly.” We identify an overlooked benefit of such behavior: entrepreneurs lie less to friendly VCs. The entrepreneur is privately informed about project success, enjoys private benefits of control, and recommends a project to the VC. The VC chooses the project and can intervene in the interim. The equilibrium features a “monitoring trap”: possible intervention leads the entrepreneur to lie, which prompts further intervention. However, both are better off if the VC commits to intervene less. We characterize implications for information acquisition, control rights, outside directors, and stage financing.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123077556","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":"Parameterizing ‘Return Effort’ and ‘Return Effort Cost’ Within Venture Capital Markets","authors":"Oghenovo A. Obrimah","doi":"10.2139/ssrn.3630223","DOIUrl":"https://doi.org/10.2139/ssrn.3630223","url":null,"abstract":"Typically, studies of efforts of economic agents do not distinguish between efforts that directly generate returns (`return effort') and efforts that facilitate demonstration of return effort, that is, `return effort cost'. This study provides formal theoretical evidence that a distinguishing of return effort from return effort cost produces rational explanations for two seemingly contradictory effects, namely, that venture capitalists (VCs) simultaneously are characterized by each of `too much effort' or `too little effort'. In stated respect, the formal theoretical model demonstrates that whereas VCs' portfolio returns are strictly convex in return effort, simultaneously, they are, in relation to return effort cost, strictly concave. In aggregate then, portfolio returns are, in relation to effort, characterized by strict concavity. In presence of rationality of ubiquity of a `too much money chasing deals' phenomenon, VCs overinvest, yet simultaneously, arrive at portfolio returns that are lower than first-best; hence arrival at inference of `too much effort'. This is a unilateral `level effect' that induces a second-best performance-effort curve, which resides just below the unattainable first-best curve. Cross-sectionally, with VCs located on the second-best curve, return effort is shown to be confluent with `richness' of VCs' investment opportunity sets. The model explicitly rules out increase of effort with riskiness of projects, establishes effort increases with richness of investment opportunity sets. Under the erroneous assumption that optimal effort is conditioned on project-specific risk, as opposed to the continuum of investment opportunity set risk, VCs appear to exert `too little effort'. Given, however, that `too little effort' is ubiquitous, every optimal realization for effort is characterized by `too little effort'. Study findings provide evidence for importance of adoption of equilibrium approaches to modeling of efforts of economic agents within different markets.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"184 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115176428","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 Theory of ICOs: Diversification, Agency, and Information Asymmetry","authors":"J. Chod, Evgeny Lyandres","doi":"10.2139/ssrn.3159528","DOIUrl":"https://doi.org/10.2139/ssrn.3159528","url":null,"abstract":"This paper develops a theory of financing of entrepreneurial ventures via crypto tokens, which is not limited to platform-based ventures. We compare token financing with traditional equity financing, focusing on agency problems and information asymmetry frictions associated with the two financing methods, as well as on risk sharing between entrepreneurs and investors. Token financing introduces an agency problem not present under equity financing (underproduction), while mitigating an agency problem often associated with equity financing (entrepreneurial effort underprovision). Our theory abstracts from all institutional and potentially transient differences between tokens and equity and is based on a single intrinsic characteristic of tokens: they represent claims to a venture’s output. We show that tokens are likely to dominate equity for ventures developing goods or services that involve low marginal production costs, those for which entrepreneurial effort is crucial, and/or those with relatively low payoff volatility. In addition, tokens can have an advantage over equity in signaling venture quality to outside investors. This paper was accepted by Kay Giesecke, finance.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"214 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117338577","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":"Financing Vaccines for Global Health Security","authors":"Jonathan Vu, Benjamin Kaplan, Shomesh E. Chaudhuri, M. K. Mansoura, A. Lo","doi":"10.2139/ssrn.3595881","DOIUrl":"https://doi.org/10.2139/ssrn.3595881","url":null,"abstract":"Recent outbreaks of infectious pathogens such as Zika, Ebola, and COVID-19 have underscored the need for the dependable availability of vaccines against emerging infectious diseases (EIDs). The cost and risk of R&D programs and uniquely unpredictable demand for EID vaccines have discouraged vaccine developers, and government and nonprofit agencies have been unable to provide timely or sufficient incentives for their development and sustained supply. We analyze the economic returns of a portfolio of EID vaccine assets, and find that under realistic financing assumptions, the expected returns are significantly negative, implying that the private sector is unlikely to address this need without public-sector intervention. We have sized the financing deficit for this portfolio and propose several potential solutions, including price increases, enhanced public-private partnerships, and subscription models through which individuals would pay annual fees to obtain access to a portfolio of vaccines in the event of an outbreak.","PeriodicalId":413208,"journal":{"name":"ERPN: Venture Capital (Sub-Topic)","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-03-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133073936","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}