Does venture capitalist activism improve investment performance?

Jackson, William E.; Bates, Timothy; Bradford, William D.

doi:10.1016/j.jbusvent.2011.02.003

Cited by 29 publications

(14 citation statements)

References 41 publications

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“…Experience and investor's skills have a direct influence on the performance of a VC-backed company (Gompers et al 2006;Bottazzi et al 2008;Bengtsson and Wang 2010;Achleitner et al 2013). Especially in the case of venture financing, this aspect seems to be important as VC investors provide usually additional advice in comparison to pure financial backing (Bonini et al 2012;Jackson et al 2012).…”

Section: Theoretical Considerations and Hypotheses Developmentmentioning

confidence: 99%

Unicorns—what drives multibillion-dollar valuations?

Bock

Hackober

2020

Bus Res

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The number of ventures with a market value of one billion USD or more has considerably increased during the last decade. Driven by new technologies and business models, these ventures became an integral part of our daily life. Particularly, the number of unicorns based in China and other regions outside the US raised during recent years whereas the phenomenon was initially limited to the US region. Existing research has mainly focused on descriptive approaches to examine the rise of these ventures but lacks knowledge on the drivers of this phenomenon. We address these research gaps and investigate the underlying factors that foster the emergence of such high-valued ventures. Our results present several economic environmental as well as investor-related factors that impact the likelihood for a venture to achieve a market valuation of more than one billion USD. Subsequently, we derive theoretical and practical implications that may foster the future emergence of new high-valued ventures, covering regulatory, investor-and venturespecific aspects.

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Section: Theoretical Considerations and Hypotheses Developmentmentioning

confidence: 99%

Unicorns—what drives multibillion-dollar valuations?

Bock

Hackober

2020

Bus Res

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“…We therefore contribute to the entrepreneurship literature by offering a better understanding of how portfolio-level risk affects the selection process in VC, the provision of capital to risky start-ups, and its impact on performance. Our study complements the strand of literature on VC fund manager specialization (Cressy et al, 2014;Cressy et al, 2007;Ewens et al 2013;Gompers et al, 2009;Humphery-Jenner, 2013;Jackson et al 2012;Knill, 2009;Matusik and Fitza, 2012;Norton and 2 As will become clear below, we use a large sample of VC funds to test this prediction. The claims made here with regards to what diversification means for risk are backed by our data.…”

Section: Introductionmentioning

confidence: 96%

“…Managing VC investments is viewed as requiring highly specialized skills, knowledge, and time to select and assist investee companies well (Dimov and De Clercq, 2006;Norton and Tenenbaum, 1993). This leads to a smaller number of investments (Bernile et al, 2007;Jackson et al, 2012;Kanniainen and Keuschnigg, 2003) or investments in a smaller set of industries (Cressy et al, 2007;Humphery-Jenner, 2013), which means that a discount (lower performance) rather than a premium for more diversified funds should be expected. Thus, managing VC investments in entrepreneurial firms is a strategic choice (generally described from the beginning in the private placement memorandum) that directly affects the type of ventures that will more easily receive capital.…”

Section: Introductionmentioning

confidence: 99%

Diversification, risk, and returns in venture capital

Buchner

Mohamed

Schwienbacher

2017

Journal of Business Venturing

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We explore an alternative, finance theory-based explanation for the documented positive relationship between fund diversification (or lack of fund specialization) and performance in venture capital (VC). Our proposed "Risk Hypothesis" posits that the expected negative impact of diversification on fund risk induces fund managers to endogenously select riskier investments, which in turn leads to higher performance of more diversified funds. While other channels may also be at play, we provide results that support this hypothesis for an international sample of VC funds. However, this effect is weakened when expertise is limited. The study offers implications of how VC fund managers investment decisions are influenced by strategic portfolio considerations, which in turn affect which innovative ventures receive funding.

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“…L'engagement se mesure notamment à travers le temps consacré aux échanges (Ehrlich et al 1994 ;Gorman et Sahlman 1989 ;Sapienza 1992), ou encore au nombre de contacts entre les partenaires. Ainsi, l'engagement se déploie dans le cadre d'interactions inter-individuelles singulières entre des chargés d'investissement et des entrepreneurs (De Clercq et Fried 2005 ;Jackson III et al 2012).…”

Section: L'engagementunclassified

“…Elles leur permettent de se référer à des règles communes d'arbitrage pour régler l'intensité d'un engagement par essence chronophage. En complément des travaux qui tendent à démontrer qu'il y a une taille de portefeuille au delà de laquelle le capital investisseur ne peut plus assurer un suivi réel (Jackson III et al 2012), nos recherches mettent en valeur le fait que les capital investisseurs se dotent de normes permettant de doser leur engagement pour concilier des enjeux contradictoires : limiter le temps dédié aux relations avec l'entrepreneur, tout en ne déplaisant pas à celui-ci et en restant vigilant pour contrôler l'évolution de l'entreprise.…”

Section: « Une Des Forces [De Capital-invest] C'est De Pouvoir Selonunclassified

Le rôle de l’organisation du travail des capital investisseurs dans la construction de relations interpersonnelles avec les entrepreneurs

Champenois¹,

Devigne²,

Puyou³

2017

fcs

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L'article, fondé sur une étude de cas d'une société de capital investissement, complète les travaux qui ont souligné l'importance des liens interpersonnels entre entrepreneurs et investisseurs en précisant l'importance des règles organisationnelles dans la création et le maintien de ces relations. Il montre comment l'organisation du travail des capital investisseurs (i.e. des règles formelles et informelles, des procédures et des dispositifs encadrant le travail) permet à ces derniers de construire des liens étroits avec les entrepreneurs tout au long des étapes de l'activité d'investissement. Ce faisant, l'article étend l'analyse de ces relations aux phases de pré-investissement et introduit une dimension organisationnelle à la littérature sur la valeur ajoutée non financière, en précisant les effets bénéfiques cruciaux de mécanismes de type bureaucratiques sur le développement de relations très personnalisées. Mots-clés : Capital investissement, valeur ajoutée non financière, entrepreneurs, dirigeants.

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Does venture capitalist activism improve investment performance?

Cited by 29 publications

References 41 publications

Unicorns—what drives multibillion-dollar valuations?

Unicorns—what drives multibillion-dollar valuations?

Diversification, risk, and returns in venture capital

Le rôle de l’organisation du travail des capital investisseurs dans la construction de relations interpersonnelles avec les entrepreneurs

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