The performance of venture capital investments: Do investors overreact?

Achleitner, Ann‐Kristin; Engel, Nico; Reiner, Uwe

doi:10.1016/j.rfe.2012.10.001

Cited by 15 publications

(7 citation statements)

References 59 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Accordingly, it seems important for project initiators to be transparent and persuasive about the funding goal. We support Achleitner, Engel, Reiner's (2013) and Sievers, Mokwa and Keienburg's (2013) conclusion that crowdfunding and traditional venture capital both require detailed, internally consistent and market-referencing business plans to achieve legitimacy, though high funding targets decrease organisational legitimacy without a convincing justification of source and use of funds.…”

Section: Funding Target and Final Fundingsupporting

confidence: 62%

Exploring entrepreneurial legitimacy in reward-based crowdfunding

et al. 2014

View full text Add to dashboard Cite

Venture financing through social networks has become a global phenomenon. The processes and drivers of crowdfunding require careful study to identify similarities and distinctions from traditional venture finance. The demonstration of project legitimacy is especially interesting because online crowdfunding limits investors' access to the entrepreneur and organisation. How do rewards-based crowdfunding projects establish and demonstrate legitimacy in this virtual, impersonal context? We employ a novel data-set collected from the Kickstarter crowdfunding platform to explore the characteristics of successful projects, including legitimating signals and content. The data reveal numerous findings linking project characteristics to legitimacy and success. First, lower funding targets and shorter duration signal legitimacy by setting modest, achievable expectations. Rewards structures, such as traditional equity investment terms, appear to generate a sense of legitimate investment returns. Finally, narrative legitimacy in the online crowdfunding context may derive more from the online platform community than the visual pitch. Our study reveals a more nuanced picture of legitimacy formation during rewards-based crowdfunding, with implications for theories of resource assembly and the practice of venture finance.

show abstract

Section: Funding Target and Final Fundingsupporting

confidence: 62%

Exploring entrepreneurial legitimacy in reward-based crowdfunding

et al. 2014

View full text Add to dashboard Cite

show abstract

“…First, we find investor-related factors in existing literature as an influencing category for the success probability of ventures. 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

View full text Add to dashboard Cite

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.

show abstract

“…Venture capital plays an important role in the level of unicorns' concentration (Testa et al, 2022). This is expressed, in particular, in the way experienced investors select companies with a high growth potential (Bengtsson, Wang, 2010;Achleitner et al, 2013). Start-ups are much more likely to succeed when they have access to expertise and business acumen of highly qualified venture capital investors (Alperovych, Hübner, 2013;Bernstein et al, 2016;Breuer, Pinkwart, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Start-ups are much more likely to succeed when they have access to expertise and business acumen of highly qualified venture capital investors (Alperovych, Hübner, 2013;Bernstein et al, 2016;Breuer, Pinkwart, 2018). Their reputation promotes the growth of asset portfolio value by reducing information asymmetry between participants (Lee et al, 2011;Achleitner et al, 2013;Hsu, 2004). Meanwhile established investors themselves become even more visible and gain an informational advantage in spotting investment opportunities by attracting additional resources for portfolio companies (Krishnan et al, 2011;Bock, Hackober, 2020).…”

Section: Literature Reviewmentioning

confidence: 99%

Relocation as a Driver of Innovative Activity: A Global Study of Unicorn Founders’ Migration

Kutsenko¹,

Tyurchev²,

Ostashchenko³

2022

Foresight and STI Governance

View full text Add to dashboard Cite

This paper investigates the migration flows of uni-corns – private companies that achieve a market value of at least one billion USD within ten years. This concept was recently introduced by professional investors but has actively entered the global expert and political agenda. The ability of national innovation systems to grow unicorns has become a new hallmark of success. This study uses the most complete sample of companies as of July 2022 (1,357 unicorns), for each of them we identified the founders, their countries of birth, and the educational institutions they graduated from.Among the main results, it is revealed that 40% of billion-dollar companies were created with the participation of foreign founders. The authors identified three country groups depending on the founders’ migration flows direction: “attracting” unicorns, “growing on their own” and “losing everything”. A comparative analysis of countries’ innovation profiles made it possible to identify the unicorn growth and attraction factors. It is emphasized that universities are a significant resource for both strategies, since most of the founders graduated from the leading world universities and every third foreign entrepreneur was educated in the country of migration. It is shown that the strategy of attracting foreign founders complements the growth strategy and could provide the main flow of unicorn founders. The authors noted that the leading unicorn countries are actively involved in the global migration flow: they not only attract the founders, but also act as their largest suppliers. The authors put forward recommendations for attracting unicorn companies.

show abstract

The performance of venture capital investments: Do investors overreact?

Cited by 15 publications

References 59 publications

Exploring entrepreneurial legitimacy in reward-based crowdfunding

Exploring entrepreneurial legitimacy in reward-based crowdfunding

Unicorns—what drives multibillion-dollar valuations?

Relocation as a Driver of Innovative Activity: A Global Study of Unicorn Founders’ Migration

Contact Info

Product

Resources

About