Selection and support strategies in venture capital financing: high-tech or low-tech, hands-off or hands-on?

Jungwirth, Carola; Moog, Petra

doi:10.1080/1369106042000224703

Cited by 18 publications

(16 citation statements)

References 30 publications

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“…This result has some important implications for the entrepreneurs. While previous research frequently emphasized that specialized Vcs are much more likely to provide support to their portfolio firms (Jungwirth/Moog 2004), my data indicates that a specialization of the Vc will not have a direct impact on the extent of support offered. Therefore, entrepreneurs do not need to directly aim for specialized investors in order to receive their support.…”

Section: Venture Capitalist Supportmentioning

confidence: 70%

The role of smart money: What drives venture capital support and interference within biotechnology ventures?

Haagen

2008

Z. Betriebswirtsch

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It is a well established fact that venture capitalists become actively involved with their portfolio firms in order to encourage a start-up's successful development. Thereby, the involvement consists of two very distinct activities: first, Vcs support the entrepreneurs, for example by providing contacts to potential customers. But second, Vcs also monitor the management's actions and if necessary actively interfere with the management's decisions. The aim of this paper is to disentangle the overall involvement of Vcs into support and interference and separately investigate the individual drivers for both activities.• An analysis of modern finance-theoretical predictions does not yield any significant results as long as only the overall involvement of the Vcs is considered. only a separation of the involvement into the dimensions of support and interference allows conclusions based on principal-agent and control rights theory. • The derived results of the separate analysis are largely in line with the agency-theory and the signalling approach of Dessein (2005). • government co-financing schemes that provide funds in the form of debt-like instruments clearly decrease the Vcs' incentives to monitor the activities of their portfolio companies while they have no effect on the extent of support provided.

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Section: Venture Capitalist Supportmentioning

confidence: 70%

The role of smart money: What drives venture capital support and interference within biotechnology ventures?

Haagen

2008

Z. Betriebswirtsch

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“…Focusing on the role of VCs, our paper can be regarded as the first step toward fruitful future researches in this field. Specifically, by considering and coping with endogeneity of VC funding, our research may contribute to the recent discussion of whether the VCs select innovative firms or support and encourage their portfolio firms to be innovative (Baum and Silverman, 2004;Jungwirth and Moog, 2004;Engel and Keilbach, 2007). 2) T-statistics in parentheses.…”

Section: Discussionmentioning

confidence: 99%

Shareholding by venture capitalists and R&D investment of start-up firms

Okamuro¹,

Zhang²

2010

COC

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We analyze the influence of ownership structure on the R&D (research and development) investment of start-up firms. Previous studies on the relationship between ownership and R&D have targeted on large listed firms and focused on ownership concentration, regardless of the types of large shareholders. We argue that shareholder's type is an important factor of R&D investment under asymmetric information, and that R&D projects, particularly those of start-up firms, strongly depend on the financing from venture capitalists (VCs). Using a unique dataset of Japanese start-up firms, we find that the shareholding by VCs have, in fact, positively affects the R&D investment and that the impact of VCs funding is especially large when the shareholding by the lead VC exceeds 10%.

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“…6. In an interesting study Jungwirth and Moog (2004) test the assumption that specialist venture capital funds, i.e. venture capitalists having "industry-specific knowledge" will select high-tech enterprises and follow a "hands-off" strategy in order to reduce transaction and agency costs.…”

Section: Notesmentioning

confidence: 99%

Financing Innovation: The Role of Norwegian Venture Capitalists in Financing Knowledge-intensive Enterprises

Langeland¹

2007

European Planning Studies

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This paper focuses on the roles and functions of the Norwegian venture capital industry in the innovation system. A lack of competent capital is often mentioned as a serious obstacle for financing innovation, and in particular for financing knowledge-intensive enterprises at their start-up and early development stages. In these stages the supply of strategic activities is just as important as capital, and venture capitalists are assumed to provide their enterprises with both capital and knowledge. Venture capital investments are also geographically clustered in cities and urban areas, and cities are said to have specific innovation advantages which reduce transaction costs associated with venture capital investing. Particularly larger cities have both a diverse knowledge-base and the geographical proximity which seem to be a prerequisite for sharing and transfer of the often complex and non-codified knowledge that are related to financing new knowledge-intensive enterprises. A better understanding of the role venture capitalists play in the innovation system may not only enhance our knowledge of innovation processes and strengthen the basis for innovation policies, but may also contribute to a better understanding of the industrial dynamics and the spatial development of a knowledge economy. The data employed in the paper comes from in-depth interviews with venture capital firms and seed funds in Norway, and from a survey of portfolio enterprises. All data are collected in 2002 and 2003.

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Selection and support strategies in venture capital financing: high-tech or low-tech, hands-off or hands-on?

Cited by 18 publications

References 30 publications

The role of smart money: What drives venture capital support and interference within biotechnology ventures?

The role of smart money: What drives venture capital support and interference within biotechnology ventures?

Shareholding by venture capitalists and R&D investment of start-up firms

Financing Innovation: The Role of Norwegian Venture Capitalists in Financing Knowledge-intensive Enterprises

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