The dynamics of switching between governmental and independent venture capitalists: theory and evidence

Abrardi, Laura; Croce, Annalisa; Ughetto, Elisa

doi:10.1007/s11187-018-0047-z

Cited by 10 publications

(12 citation statements)

References 39 publications

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“…GVCs are expected to provide social value, yet failing to provide financial value may raise reputational concerns and questions over the public program and the GVCs' efficacy. There is an ongoing debate on how much social returns and rural survival should be allowed to cost (Abrardi et al 2019;Colombo et al 2016).…”

Section: Introductionmentioning

confidence: 99%

How individual cognitions overshadow regulations and group norms: a study of government venture capital decisions

et al. 2019

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This paper explores how government venture capitalists approve or reject financing applications. Based on longitudinal observations, complemented by interviews, documentation, and secondary data, the findings show the limited influence of the regulative and normative logics (e.g., formal guidelines and accepted behavior) on government venture capitalists' decisions. Instead, individual decisions are observed to be largely overshadowed by cognitions and heuristics, which dominate formal regulations and socially constructed group-level norms. Although official decision communications state that regulations have been followed, the evidence suggests that the cognitive logic dominates the funding decision-making process through a set of overshadowing forces that restrict the influence of the normative and regulative logics on funding decisions. This research has implications for venture financing and highlights the importance of cognitions in shaping venture capital decisions.

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Section: Introductionmentioning

confidence: 99%

How individual cognitions overshadow regulations and group norms: a study of government venture capital decisions

et al. 2019

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“…To our knowledge there are only two works explicitly studying the switching phenomenon in the VC industry (Abrardi et al 2018;Cumming and Dai 2013). Another related small group of studies look at the dynamics that stimulate the investment by other VCs in follow-on rounds, also when mixed funding applies (Brander et al 2015;Guerini and Quas 2016).…”

Section: Introductionmentioning

confidence: 99%

“…The authors, who consider only investments by independent venture capital funds (IVCs), find that ventures whose perceived quality is upwardly revised are more likely to switch to more reputable IVCs and to accept lower pre-money valuation and smaller investment size in follow-on rounds. Abrardi et al (2018) propose a formal theoretical model to explain why an incumbent VC should "dump" a venture and a new VC should take it on. They concentrate on the circumstances in which the switching occurs from a lead IVC to a governmental VC (GVC) and vice versa.…”

Section: Introductionmentioning

confidence: 99%

“…We build on the empirical findings of Abrardi et al (2018) by examining the switching phenomenon in the light of different VC investor types. VCs represent a heterogeneous crowd with different governance structures.…”

Section: Introductionmentioning

confidence: 99%

“…Differently from Abrardi et al (2018), we investigate whether and how the perceived quality of a venture and the reputation of the incumbent VC are affecting the propensity to switch from an IVC to another IVC, or to other types of VC investors (e.g. GVC, BVC and CVC).…”

Section: Introductionmentioning

confidence: 99%

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The role of venture quality and investor reputation in the switching phenomenon to different types of venture capitalists

Croce

Ughetto

2019

J. Ind. Bus. Econ.

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We examine how the perceived quality of a venture and the reputation of the incumbent Venture Capitalist (VC) are affecting the propensity to switch from an independent VC (IVC) to another IVC, to a governmental (GVC), a bank-affiliated (BVC) and a corporate (CVC). We find that high perceived quality ventures are more likely to switch from a IVC to another IVC, for whatever level of reputation of the incumbent. The quality of the venture matters in the switching to a BVC too, when the reputation of the incumbent IVC is not particularly high. Conversely, the lower is the perceived quality of the venture and the lower is the reputation of the incumbent IVC, the higher is the likelihood to rematch with a GVC. Finally, results also suggest that the probability of successful exit increases when a switching occurs from an IVC to a new lead IVC or to a CVC.

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The changing patterns of venture capital investments in Europe

et al. 2019

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In this paper we analyse the changes in the patterns of investments for venture capital (VC) investors with different governance structures. We distinguish independent, corporate, bank-affiliated and governmental VC investors. Focusing on a sample of VC investments made in the period 1998-2014 in 28 EU-member countries and Israel, we compute specialization indexes for each investor type along five dimensions (age and industry of target, geographical distance; cross-border and syndicated investments) and compare their evolution across four time periods (booming

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The dynamics of switching between governmental and independent venture capitalists: theory and evidence

Cited by 10 publications

References 39 publications

How individual cognitions overshadow regulations and group norms: a study of government venture capital decisions

How individual cognitions overshadow regulations and group norms: a study of government venture capital decisions

The role of venture quality and investor reputation in the switching phenomenon to different types of venture capitalists

The changing patterns of venture capital investments in Europe

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