Competition in the Venture Capital Market and the Success of Startup Companies: Theory and Evidence

Hong, Suting; Serfes, Konstantinos; Thiele, Veikko

doi:10.2139/ssrn.3113746

Cited by 2 publications

(1 citation statement)

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“…traditional argument is that investors need equity to have incentives for providing more valueadding services. This is typically modelled as a two-sided moral hazard problem (see, e.g., Da Rin et al 2012, andSerfes, Hong, andThiele (2018)). The reason for using equity in our model is also related to incentives, but not to moral hazard.…”

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confidence: 99%

May the Force be With You: Investor Power and Company Valuations

Hellmann¹,

Thiele²

2018

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This paper examines the effect of investor power in a model of staged equity financing. It shows how the usual effect where market power reduces valuations can be reversed in later rounds. Once they become insiders, powerful investors may use their market power to increase, not decrease valuations. Even though powerful investors initially lower valuations, companies prefer to bring them inside to leverage their power in later financing rounds. The paper also makes predictions about investor returns, and issues a warning that unrealized interim returns can be misleading predictors of final realized returns when powerful investors distort interim valuations.

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May the Force be With You: Investor Power and Company Valuations

Hellmann¹,

Thiele²

2018

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Smart-lab as an example of the incubation and acceleration platform for start-ups – challenges and barriers

Niedzielski

Zioło

Oliwa

et al. 2020

OES

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Purpose -The aim of the article is to indicate the role and importance of acceleration platforms in stimulating the development of the start-up market in Poland, on the example of the Smart-Lab incubation and acceleration platform, as a part of the "e-Pionier" project implemented from EU funds under the "Polska Cyfrowa" Program.Research method -The research methods are: analysis and synthesis, induction and deduction, desk research, case study.Results -Five MVPs (Minimum Viable Products) were obtained, constituting an original, innovative Smart-Lab Project solution in response to particular socio-economic problems reported by local government units.Originality /value / implications /recommendations -The article highlights the issues of the start-up market and the role of acceleration platforms in stimulating the development of this market, as part of the perceived need for a wider analysis of this kind of research problem.

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Competition in the Venture Capital Market and the Success of Startup Companies: Theory and Evidence

Cited by 2 publications

References 64 publications

May the Force be With You: Investor Power and Company Valuations

May the Force be With You: Investor Power and Company Valuations

Smart-lab as an example of the incubation and acceleration platform for start-ups – challenges and barriers

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