Should I stay, or should I go? – How fund dynamics influence venture capital exit decisions

Bock, Carolin; Schmidt, Maximilian

doi:10.1016/j.rfe.2015.09.002

Cited by 13 publications

(2 citation statements)

References 125 publications

(262 reference statements)

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“…On the other hand, the investment in R&D personnel is also accompanied by extremely high risks due to its disadvantages of a long cycle, high input and immediate effect unavailability. Laura Putre (2016) [8] , Carolin Bock & Mazimilian Schmidt (2015) [9] and others have confirmed through empirical research that technological innovation has a significant promoting effect on corporate performance and it is accompanied by a significant time lag. By constructing a binary logistic model, Ola Lome, Alf Gunnar Heggeseth & Øystein Moen (2016) [3] found that the impact of enterprises' investment in R&D on their earnings has a deferred effect, and its impact lagging for three phases is the most significant one.…”

Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 99%

Research on the Impact of High-tech Enterprises’ Investment in R&D Staff on their Financial Competitiveness

Wu¹,

Yu²

2023

Proceedings of the 2022 2nd International Conference on Business Administration and Data Science (BADS 2022)

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Taking 2014-2019 A-share listed high-tech enterprises as the research objects, the paper carries out research on the impact of high-tech enterprises' investment in R&D staff on their financial competitiveness through Stata, the data analysis software. It first uses factor analysis to assign values to financial competitiveness and then examines the impact of investment in R&D staff on enterprises' financial competitiveness. It can be seen from the research results that the investment in R&D staff will bring a positive incentive effect in the long run despite its adverse impact on enterprises' financial competitiveness in the short term.

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Section: Theoretical Analysis and Research Hypothesismentioning

confidence: 99%

Research on the Impact of High-tech Enterprises’ Investment in R&D Staff on their Financial Competitiveness

Wu¹,

Yu²

2023

Proceedings of the 2022 2nd International Conference on Business Administration and Data Science (BADS 2022)

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“…Note-se que o sucesso da indústria depende intimamente da capacidade do VC em realizar ganhos no desinvestimento. Desinvestimentos bem-sucedidos são caracterizados por elevados retornos, o que contribui para o aumento da reputação do VC e desmobiliza recursos que podem ser utilizados em novos investimentos (BOCK; SCHMIDT, 2015).…”

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Caracterização do ciclo de investimentos de venture capital em startups brasileiras em termos de rodadas de investimentos e estratégias de desinvestimento a partir de dados da Crunchbase

Gereto¹,

Sarfati²

2020

RMPE

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Recebido em 04 de Junho de 2019 Aprovado em 18 de Novembro de 2019 RESUMOEsta pesquisa caracteriza qual é o ciclo de investimento e desinvestimento de venture capital (VC) em startups brasileiras registradas na base de dados da Crunchbase. Startup é um estado transitório em que a organização necessita de sucessivos aportes de recursos para superar os desafios inerentes ao seu estágio. Em função disso, recorrem a fundos de venture capital (VCs), que as financiam mediante expectativa de lucro ao desinvestimento. O presente estudo utilizou de análises descritivas de dados para revelar diversas informações sobre o ciclo de investimentos de VCs nas startups brasileiras. Com base em uma amostra de dados secundários contendo informações sobre 436 startups brasileiras, conclui-se que o horizonte médio de investimento foi reduzido de cerca de 8,2 anos em 2018 para 1,3 anos para desinvestimentos realizados após 2015. Ainda, nota-se que a principal estratégia de desinvestimento é a aquisição, geralmente com participação de empresas estrangeiras que objetivam a entrada ou expansão no mercado brasileiro. Palavras-chave: venture capital, startups, ciclo de investimento, rodadas de investimento, estágio de startups, desinvestimento. INTRODUÇÃOStartups são empresas nascentes que procuram solucionar problemas reais de um determinado tipo de consumidor. Tripathi et al. (2019) expuseram algumas das principais definições de startups presentes na literatura atual, incluindo "organização temporária em busca de escalabilidade, repetitividade e modelo de negócios lucrativo" (BLANK; DORF, 2012) e "instituição humana desenhada para criar um novo produto ou serviço em um ambiente de elevadas incertezas" (RIES, 2011). Ambos autores sugerem que startup é um estado transitório,

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Venture capital exit after venture IPO

Li,

Chi,

Lan

et al. 2024

Strategic Entrepreneurship

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Research SummaryVenture capital firms (VCs) sometimes continue to hold significant equity stakes in entrepreneurial ventures after venture IPO. The information economics view suggests that retaining equity signals VC commitment and venture quality. This study conceptualizes retaining equity as holding an exchange option, the option to exchange VCs' own valuation of IPO ventures for the market's valuation. Holding this option allows VCs to benefit from the ventures' upside potential. Since exit amounts to giving up the option, the option value represents an opportunity cost of exit. VCs may delay exit if this option is sufficiently valuable. The study examines two key conditions that interact to increase the value of this option: uncertainty and positive private information. This study contributes to research on VC exit and real options.Managerial SummaryWhen do VCs retain equity rather than exit after venture IPO? Researchers have addressed the impact of signaling, cash constraints, human capital constraints, blockholding, VC fund performance, portfolio diversification and institutional features. We identify a previously unrecognized driver: to retain the opportunity to benefit from an IPO venture's upside potential that is yet to be fully recognized or realized. We submit that VCs' incentive to retain equity increases with uncertainty in the venture's industry, and VCs' positive private information as indicated by venture patent applications and positive market surprises in the venture's industry. We find largely supportive evidence for the positive joint effect of uncertainty and private information on the decision to retain equity within the first year or even two years after IPO lockup expiration.

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Should I stay, or should I go? – How fund dynamics influence venture capital exit decisions

Cited by 13 publications

References 125 publications

Research on the Impact of High-tech Enterprises’ Investment in R&D Staff on their Financial Competitiveness

Research on the Impact of High-tech Enterprises’ Investment in R&D Staff on their Financial Competitiveness

Caracterização do ciclo de investimentos de venture capital em startups brasileiras em termos de rodadas de investimentos e estratégias de desinvestimento a partir de dados da Crunchbase

Venture capital exit after venture IPO

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