Download or read book The Design of Syndicates in Venture Capital written by Giacinta Cestone and published by Fundacion BBVA. This book was released on 2006 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Syndication of Venture Capital Investments written by Finn Rieder and published by diplom.de. This book was released on 2003-09-03 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inhaltsangabe:Abstract: Cooperation among financial institutions is a persistent feature of the equity issuance process. Also, the syndication of venture capital investments is common practice among venture capitalists. Despite the importance of syndication, surprisingly little is known on the motives and structure of syndication. Further-more, there is hardly any empirical evidence for Europe or particularly Germany on the syndication behaviour of VC organisations and the factors influencing their overall propensity to co-invest. On the one hand, the purpose of this paper is to compile and summarise all aspects of the existing theory on VC syndication. Therefore, the evidence from the few empirical studies that were so far carried out on this topic is discussed. Thus, the general theory on syndication, which is thought to be independent from peculiar VC industries, serves as the framework throughout this paper which is complemented by the results of the empirical analyses done so far by different authors. On the other hand, this text has also an explorative component where it is analysed if and to what degree findings of the existing studies also hold for the German VC market. This analysis is done by the use of a data base listing a total of 3,230 VC investments in German portfolio companies. The nature of the data base at hand is not designed to allow for conclusions on all relevant aspects of syndication. But the claim of this paper is to use and analyse it whenever it is possible and the data base can be linked to aspects on syndication discussed throughout the different chapters. Firstly, this paper gives a theoretical overview on general motives behind VC syndication which leads to a discussion which rational is more important in explaining VC syndicates and if there are differences between the North American and European VC market with regards to this. Then, as the principal part of this paper, various factors influencing the propensity of VC investors to syndicate are analysed and, whenever possible and appropriate, also reviewed based on the data base. The next part examines the process of forming and managing a syndicate, after the decision to co-invest a deal was made built upon the motives and factors of influence, and to what extent networking activities play a role in it. After this, it is discussed if syndicates enhance the firm value If the portfolio company and whether there is a difference between the value added of syndicates [...]

Download or read book Coordination Frictions in Venture Capital Syndicates written by Ramana Nanda and published by . This book was released on 2017 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: An extensive literature on venture capital has studied asymmetric information and agency problems between investors and entrepreneurs, examining how separating entrepreneurs from the investor can create frictions that might inhibit the funding of good projects. It has largely abstracted away from the fact that a startup typically does not have just one investor, but several VCs that come together in a syndicate to finance a venture. In this chapter, we therefore argue for an expansion of the standard perspective to also include frictions within VC syndicates. Put differently, what are the frictions that arise from the fact that there is not just one investor for each venture, but several investors with different incentives, objectives and cash flow rights, who nevertheless need to collaborate to help make the venture a success? We outline the ways in which these coordination frictions manifest themselves, describe the underlying drivers and document several contractual solutions used by VCs to mitigate their effects. We believe that this broader perspective provides several promising avenues for future research.

Download or read book Venture Deals written by Brad Feld and published by John Wiley & Sons. This book was released on 2011-07-05 with total page 245 pages. Available in PDF, EPUB and Kindle. Book excerpt: An engaging guide to excelling in today's venture capital arena Beginning in 2005, Brad Feld and Jason Mendelson, managing directors at Foundry Group, wrote a long series of blog posts describing all the parts of a typical venture capital Term Sheet: a document which outlines key financial and other terms of a proposed investment. Since this time, they've seen the series used as the basis for a number of college courses, and have been thanked by thousands of people who have used the information to gain a better understanding of the venture capital field. Drawn from the past work Feld and Mendelson have written about in their blog and augmented with newer material, Venture Capital Financings puts this discipline in perspective and lays out the strategies that allow entrepreneurs to excel in their start-up companies. Page by page, this book discusses all facets of the venture capital fundraising process. Along the way, Feld and Mendelson touch on everything from how valuations are set to what externalities venture capitalists face that factor into entrepreneurs' businesses. Includes a breakdown analysis of the mechanics of a Term Sheet and the tactics needed to negotiate Details the different stages of the venture capital process, from starting a venture and seeing it through to the later stages Explores the entire venture capital ecosystem including those who invest in venture capitalist Contain standard documents that are used in these transactions Written by two highly regarded experts in the world of venture capital The venture capital arena is a complex and competitive place, but with this book as your guide, you'll discover what it takes to make your way through it.

Download or read book Coordination Frictions in Venture Capital Syndicates written by Ramana Nanda and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: An extensive literature on venture capital has studied asymmetric information and agency problems between investors and entrepreneurs, examining how separating entrepreneurs from the investor can create frictions that might inhibit the funding of good projects. It has largely abstracted away from the fact that a startup typically does not have just one investor, but several VCs that come together in a syndicate to finance a venture. In this chapter, we therefore argue for an expansion of the standard perspective to also include frictions within VC syndicates. Put differently, what are the frictions that arise from the fact that there is not just one investor for each venture, but several investors with different incentives, objectives and cash flow rights, who nevertheless need to collaborate to help make the venture a success? We outline the ways in which these coordination frictions manifest themselves, describe the underlying drivers and document several contractual solutions used by VCs to mitigate their effects. We believe that this broader perspective provides several promising avenues for future research.

Download or read book The Venture Capital Cycle written by Paul Alan Gompers and published by MIT Press. This book was released on 2004 with total page 592 pages. Available in PDF, EPUB and Kindle. Book excerpt: An analysis of the venture capital process, from fund-raising through investing to exiting investments; a new edition with major revisions and six new chapters that reflect the latest research.

Download or read book Cultural Differences and Cross Border Venture Capital Syndication written by Na Dai and published by . This book was released on 2015 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine cross-border syndication in investments led by foreign venture capitalists (VCs) focusing on the potential correlation between cultural differences and the formation of VC syndicates. Contrary to the risk-sharing motive, we find that a greater cultural disparity between the countries of investors and their companies is actually associated with smaller VC syndicates. This is driven largely by lesser local investor representation in foreign VC led syndicates. However, certain cultural disparity related syndication strategies, such as the involvement of locally-experienced foreign VCs or syndicate members from culturally similar countries, are associated with greater presence of local VCs who provide valuable monitoring services. We further show that these culture linked syndication approaches are significantly correlated with VC financing and monitoring strategies in cross-border investments and their eventual success.

Download or read book Birds of a Feather or Celebrating Differences The Formation and Impact of Venture Capital Syndication written by Qianqian Du and published by . This book was released on 2009 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines venture capitalists' preferences for syndication partners. Do venture capital firms prefer partners that are similar to or different from them? How do venture capitalists' preferences for partners affect the performance of the syndicated investments? Will the choice of syndication partners have any impact on the venture capital firms themselves? Heterogeneity among syndication partners may increase transaction costs, but offers syndication partners valuable learning opportunities in the long run, suggesting a tradeoff between the short-term costs versus long-term benefits. Using data on U.S. venture capital investments, this paper shows that venture capital firms are less likely to syndicate with partners who are different from them. The preferences for syndication partners, however, have different implications for the portfolio companies and the venture capital firms. Companies funded by heterogeneous syndicates are less likely to go public or be acquired by other companies. However, venture capital firms that co-invest with more heterogeneous partners are more likely to survive. The paper develops a new method for empirically examining the formation of syndication among multiple firms. It also addresses issues of endogeneity.

Download or read book Venture Capital Syndicate Formation Prior IPO written by Zeina Khalil Mehdi and published by . This book was released on 2011 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research paper will examine the formation of syndicates in Venture Capital (VC) investments for 2477 US VC-backed IPOs that took place between 1999 and 2006. Previous studies have discussed the perceived benefits of syndications, the potential costs associated with it and the interrelationships between members of the syndication network. However, there is a gap in the literature with regards to assessing the impact of timing with the syndicate formation across rounds on the IPO. This paper examines the trend in syndicate formation prior to IPO and tests how the various syndicate formation behaviors (early versus late rounds syndicate concentration) impact the IPO underpricing and the premium.

Download or read book The Oxford Handbook of Venture Capital written by Douglas Cumming and published by Oxford University Press. This book was released on 2012-04-20 with total page 1126 pages. Available in PDF, EPUB and Kindle. Book excerpt: Venture capital (VC) refers to investments provided to early-stage, innovative, and high growth start-up companies. A common characteristic of all venture capital investments is that investee companies do not have cash flows to pay interest on debt or dividends on equity. Rather, investments are made with a view towards capital gain on exit. The most sought after exit routes are an initial public offering (IPO), where a company lists on a stock exchange for the first time, and an acquisition exit (trade sale), where the company is sold in entirety to another company. However, VCs often exit their investments by secondary sales, wherein the entrepreneur retains his or her share but the VC sells to another company or investor buybacks, where the entrepreneur repurchases the VC`s interest and write-offs (liquidations). The Oxford Handbook of Venture Capital provides a comprehensive picture of all the issues dealing with the structure, governance, and performance of venture capital from a global perspective. The handbook comprises contributions from 55 authors currently based in 12 different countries.

Download or read book Introduction to Venture Capital Finance written by Chris Bovaird and published by Financial Times/Prentice Hall. This book was released on 1990 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this book is to provide a basic factual text on venture capital finance, and the venture capital industry in the UK. It considers a variety of topics such as the business expansion scheme, changes in the investment market, and what entrepreneurs expect from venture capitalists.

Download or read book Venture Capital Networks written by Cristiano Bellavitis and published by . This book was released on 2017-12-12 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the venture capital (VC) industry, firms often co-invest with other peers in syndicated deals. The process of syndication is a form of investment alliance that generates networks of VC firms and start-up companies. Despite the prominent role played by syndicates, extant entrepreneurship literature found contradicting evidence on the relationship between the practice of syndication and the performance of both the start-up and the investors. In fact, our understanding of the circumstances under which syndicates have the potential to boost performance, rather than hamper them, is still limited. Previous literature suggested that syndicates improve the access to resources for both the entrepreneurs and the VC partners. However, syndicates, as opposed to solo investments, carry agency costs such as free riding and conflicts of interests among co-investors. I investigate the role of syndicates on performance building upon network and alliance literature. Recent studies show that syndicates, networks, and alliances have the potential to be both an asset and a liability for the focal actor. This applies to the amount of connections that a firm has, the structure of its network, or the composition of the alliance. I apply a contingency perspective to investigate the boundary conditions under which syndication exerts a positive rather than a negative effect on performance. I test theoretical claims at three levels of analysis: at the start-up level, at the VC investors' level, and the syndicate level.

Download or read book The Venture Capital Investment Process written by Darek Klonowski and published by Springer. This book was released on 2015-12-04 with total page 283 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book provides one of the most comprehensive overviews of the internal and external challenges of processing venture capital deals, providing an eight stage investment model that breaks down each part of the deal into its own specific challenges and rewards.

Download or read book Venture Capital Networks written by Cristiano Bellavitis and published by Business Expert Press. This book was released on 2017-12-12 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the venture capital (VC) industry, firms often co-invest with other peers in syndicated deals. The process of syndication is a form of investment alliance that generates networks of VC firms and start-up companies. Despite the prominent role played by syndicates, extant entrepreneurship literature found contradicting evidence on the relationship between the practice of syndication and the performance of both the start-up and the investors. In fact, our understanding of the circumstances under which syndicates have the potential to boost performance, rather than hamper them, is still limited. This book intends to fill this gap and explore the performance dynamics surrounding networks in the venture capital industry. The text also provides introductory knowledge to those interested in network studies and methods.

Download or read book Peer Monitoring Syndication and the Dynamics of Venture Capital Interactions written by Onur Bayar and published by . This book was released on 2019 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a new rationale for the formation of VC syndicates, and theoretically analyze the dynamics of VC syndicates. In our model, an entrepreneur needs financing from VC investors to implement his firm's positive NPV project. In addition to financing, VCs can provide the firm with two inputs (each in a different area of activity), which can increase the probability of project success: these inputs can be provided either by a single VC, or by two different VCs, each operating in his own area of expertise. We analyze the firm's equilibrium choice between financing the project by contracting with a single VC, by contracting individually with two VCs, or by contracting with a syndicate consisting of two VCs. Our analysis generates several testable predictions for the equilibrium choice of the structure of VC financing, for the evolution of this structure across financing rounds, as well as for the dynamics of the composition of VC syndicates and for how this dynamics affects entrepreneurial firms' probability of successful exit. We also present empirical evidence that is consistent with the predictions of our model.

Download or read book From Value added VCs to Equity Crowdfunding Syndicates written by Louis Coppey and published by . This book was released on 2016 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: "If you look at the venture business, for an industry that funds innovation - it really doesn't have that much", declared Josh Kopelman, founding partner at First Round Capital, in 2013. Notwithstanding, observing the industry in the last decade, one can identify at least two evolutions. First, a new generation of VC firms, to which First Round Capital belongs, has emerged and is reinventing VC firms' traditional organization to offer additional services beyond investment capital and their partners' time. Second, equity crowdfunding, spearheaded by equity crowdfunding syndicates, now allows entrepreneurs to raise funds entirely online and has become an interesting alternative to traditional venture capital. This paper's first objective is to describe and evaluate the strategies embraced by these new types of value-added VC firms. The second objective is to review online syndicates' characteristics and their evolution since their inception 3 years ago. I first consider whether they can become credible competitors of VC firms and end with a few predictions regarding the space equity crowdfunding syndicates are likely to occupy. I show that the new emphasis placed on VC firms' value added services has empowered new entrants in the VC market, enabling them to break into the concentrated circle of the very few VC firms actually earning significant returns. Beyond the objective of improving their portfolio companies' operating performance, I show that VC firms embrace this strategy in order to 1) increase the size of their inbound deal flow, 2) improve the firm's brand and 3) provide General Partners with additional arguments to close competitive deals. In a second part, I argue that online syndicates could increasingly embrace the key success factors shared among successful venture capital firms. However, their lack of reputation may undermine their performance in the next venture capital cycle. I conclude that equity crowdfunding syndicates are primarily an interesting addition to the traditional early-stage industry, rather than a substitute for traditional VC firms. Lastly, I show how VC investors can take advantage of online syndicates to increase their firms' competitiveness.

Download or read book The Role of Venture Capital Syndication in Value Creation for Entrepreneurial Firms written by Xuan Tian and published by . This book was released on 2014 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides evidence that venture capital (VC) syndication creates value for entrepreneurial firms in two dimensions. First, VC syndication creates product market value for their portfolio firms. Specifically, VC syndicates invest significant amounts in younger firms, in earlier financing rounds, and in early stage firms. Further, VC syndicates nurture innovation of their portfolio firms and help them achieve better post-IPO operating performance. Second, VC syndication creates financial market value for their portfolio firms. Specifically, VC syndicate-backed firms are more likely to have a successful exit, enjoy a lower initial public offering (IPO) underpricing, and receive a higher IPO market valuation. The findings are robust to a variety of alternative syndication measures, subsamples, econometric models, and controlling for endogeneity in VC syndication.