Download or read book Venture Capital Contracting and the Valuation of High technology Firms written by Joseph McCahery and published by Oxford University Press, USA. This book was released on 2003 with total page 512 pages. Available in PDF, EPUB and Kindle. Book excerpt: Venture capitalists are specialized intermediaries that channel capital to firms and professional services to companies that might otherwise be excluded from the corporate debt market and other sources of private finance. Venture capital financing is used to invest mainly in small and medium size firms with good growth and exit potential. Typically, venture capital firms concentrate in industries with a great deal of uncertainty, where the information gaps among entrepreneurs and venturecapitalist are commonplace. Venture capital firms are active in sectors with a high informational opacity and agency costs. These ventures are identified as financially constrained. Start-up firms rely on venture capital as one of their main sources of funding. Recent empirical research has found that the effect of venture capital on the success of these ventures is considerable. The value of venture capital investment is borne out by the figures which show that venture capital backed-firms grow on average twice as fast as those not backed by venture capital firms. The debate on the development of an efficient venture capital market has forced us to consider which financial instruments, legal rules, labour laws, contracts, and other institutional structures are necessary to create a venture capital market. The contributions to this book have offered insights on the structure of venture capital fund financial contracts, the screening, monitoring and staging of potential investments, the importance of partnership and other legal business forms for investors and start-up firms, the funding of innovation, the valuation of investments, and the exit routes for venture capitalists. The essays in this volume, which draw upon international evidence and ideas from financial economics and law, contribute to further research on the relationship between venture capitalists and entrepreneurs. This collection analyses the main legal and contracting structures in the venture capital cycle. Exploring the differences between the US and European venture capital markets, it focuses on diverse organizational and contractual techniques, such as staged finance, convertible securities, board functions and other forms of control, and the role of exit. Theoretical chapters examine the valuation of entrepreneurial firms and the liquidiation preference in convertible securities. Finally, the book assesses the importance of the IPO market for entrepreneurs, investors and venture capitalists alike.
Download or read book How Venture Capital Works written by Phillip Ryan and published by The Rosen Publishing Group, Inc. This book was released on 2012-07-01 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: Explanations to the inner workings of one of the least understood, but arguably most important, areas of business finance is offered to readers in this engaging volume: venture capital. Venture capitalists provide necessary investment to seed (or startup) companies, but the startup is only the beginning, there is much more to be explored. These savvy investors help guide young entrepreneurs, who likely have little experience, to turn their businesses into the Googles, Facebooks, and Groupons of the world. This book explains the often-complex methods venture capitalists use to value companies and to get the most return on their investments, or ROI. This book is a must-have for any reader interested in the business world.
Download or read book Principal Agents in Venture Capital and Private Equity Contracting written by Steffen Schupp and published by GRIN Verlag. This book was released on 2006-10-25 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,0, Technical University of Darmstadt (Department of Banking and Finance), course: Venture Capital and Private Equity, 53 entries in the bibliography, language: English, abstract: In the last decades venture capital has emerged as the major source of financing for young and innovative firms, replacing more and more bank credits, but also creating a new market niche for start-ups with a high risk of failure that may create substantial returns. With success stories of companies like Apple Computer, Intel, Federal Express, Microsoft, Sun Mircosystem, Compaq or SAP, this form of funding is meanwhile widely accepted. In the late 1970s the venture capital industry increased dramatically in the United States. In contrast, the venture capital sector in continental Europe used to be a very small market up to 1990. Figure 1 in the appendix shows the development of funds committed to independent US and European venture capital funds.1Today the venture fund market in Germany has reached a managed fund size of US$ 43 billion, an increase of 13.2 percent in regard to the previous year.2Therefore venture capital plays a crucial role in respect to innovation of an economy and has significant positive effects on society and a country’s economy. According to Sahlmann (1990) the term “venture capital” is defined as a “professional managed pool of capital that is invested in equity linked securities of private ventures at various stages in their development”. Gompers and Lerner (2001a) limit the definition to investments in privately held, high growth companies. Originally, the intent of venture capital is to finance young innovative companies. The term private equity describes the investment of equity in companies that are already established, e.g. companies in later stages of their life cycle. Today the two terms are often used as synonyms. In this paper we keep focusing on companies in early stages of life and thus use the term venture capital only. It should be mentioned that the focus of venture capital firms can be quite different. First venture capitalists can concentrate on different stages of companies (seed, start-up, first, second, third, fourth stage, bridge stage and liquidity stage financing) and second, venture capitalist can finance different industries or focus on a special group. The specialization has the advantage to gather deepened technological knowledge about an industry that can be used within the “venture cycle”. The innovative high-tech sectors, such as biotech or nanotech, would be good examples.
Download or read book Three essays on venture capital contracting written by Ibolya Schindele and published by Rozenberg Publishers. This book was released on 2005 with total page 181 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Value Added by Venture Capital Firms written by Jens Ortgiese and published by Josef Eul Verlag GmbH. This book was released on 2007 with total page 368 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book VC written by Tom Nicholas and published by Harvard University Press. This book was released on 2019-06-03 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: From nineteenth-century whaling to a multitude of firms pursuing entrepreneurial finance today, venture finance reflects a deep-seated tradition in the deployment of risk capital in the United States. Tom Nicholas’s history of the venture capital industry offers a roller coaster ride through America’s ongoing pursuit of financial gain.
Download or read book Risk Appraisal and Venture Capital in High Technology New Ventures written by Gavin C. Reid and published by Routledge. This book was released on 2007-09-06 with total page 241 pages. Available in PDF, EPUB and Kindle. Book excerpt: Appealing to both mainstream and evolutionary economists, this book, written by an author with an excellent track record, is acrossover treatment of quantitative and qualitative risk analysis within the setting of new high technology ventures.
Download or read book Venture Capital and Private Equity Contracting written by Douglas J. Cumming and published by Academic Press. This book was released on 2013-08-21 with total page 781 pages. Available in PDF, EPUB and Kindle. Book excerpt: Other books present corporate finance approaches to the venture capital and private equity industry, but many key decisions require an understanding of the ways that law and economics work together. This revised and updated 2e offers broad perspectives and principles not found in other course books, enabling readers to deduce the economic implications of specific contract terms. This approach avoids the common pitfalls of implying that contractual terms apply equally to firms in any industry anywhere in the world. In the 2e, datasets from over 40 countries are used to analyze and consider limited partnership contracts, compensation agreements, and differences in the structure of limited partnership venture capital funds, corporate venture capital funds, and government venture capital funds. There is also an in-depth study of contracts between different types of venture capital funds and entrepreneurial firms, including security design, and detailed cash flow, control and veto rights. The implications of such contracts for value-added effort and for performance are examined with reference to data from an international perspective. With seven new or completely revised chapters covering a range of topics from Fund Size and Diseconomies of Scale to Fundraising and Regulation, this new edition will be essential for financial and legal students and researchers considering international venture capital and private equity. An analysis of the structure and governance features of venture capital contracts In-depth study of contracts between different types of venture capital funds and entrepreneurial firms Presents international datasets from over 40 countries around the world Additional references on a companion website Contains sample contracts, including limited partnership agreements, term sheets, shareholder agreements, and subscription agreements
Download or read book Handbook of Research on Venture Capital written by Hans Landstr”m and published by Edward Elgar Publishing. This book was released on 2012-01-01 with total page 305 pages. Available in PDF, EPUB and Kindle. Book excerpt: ÔThis exciting second volume of cutting-edge research on venture capital takes up where volume one leaves off, bringing greater depth to topics covered in the first volume (such as angel investing) and adding new topics and insights. It poses interesting questions such as Ð Is venture capital in crisis? Are new models of early investing needed? Ð and offers carefully researched answers. Landstršm and Mason provide insightful commentary and skillfully pinpoint the contributions of a talented set of researchers. Both scholars and practitioners of venture capital will want to read this book.Õ Ð Harry J. Sapienza, University of Minnesota, US ÔThe second edition of the Handbook of Research on Venture Capital provides an important guidepost for venture capital researchers. As Landstršm and Mason point out, the nature of venture capital has changed dramatically over the last ten years. The asset class as a whole has failed to return principal and the old model is under tremendous strain. The contributors nicely highlight many of these changes, especially how venture capital has scaled beyond the US. For those of us active in venture capital research, the chapters raise many interesting research questions that deserve further attention.Õ Ð Andrew Zacharakis, Babson College, US This Handbook charts the development of venture capital research in light of the global financial crisis, starting with an analysis of the current venture capital market and the changing nature of the business angel market. Looking at governance structures, the performance of venture capitalists in terms of investments, economic impact and human capital, and the geographical organization of business angels and venture capital global ÔhotspotsÕ, this book also analyses the current state of venture capital research and offers a roadmap for the future.
Download or read book Venture Capital and the Finance of Innovation written by Andrew Metrick and published by John Wiley & Sons. This book was released on 2021-04-13 with total page 498 pages. Available in PDF, EPUB and Kindle. Book excerpt: An invaluable resource for current and aspiring technology investors, Venture Capital and the Finance of Innovation provides an in-depth understanding of the tools and models needed to succeed in this competitive and highly fluid business environment. Building on a comprehensive introduction to fundamental financial and investment principles, the text guides the reader toward a robust skill set using enterprise valuation and preferred stock valuation models, risk and reward, strategic finance, and other concepts central to any venture capital and growth equity investment. Two features of the book stand out from other sources on the subject. First, it pays special attention to the enterprise valuation methodology for high-growth companies. What drives the value of a company that has little physical assets, losing money now but has a small chance of achieving great success in several years? How do you create estimates for sales, profit and return on capital when little data is available? The book answers these questions using a discounted cash flow model that is tailor-made for technology companies (DCF.xlsx downloadable from the instructor website), and the comparables model. Second, it highlights the most valuation-relevant feature of VC term sheets, namely the use of convertible preferred stock. The book shows the reader how to use a user-friendly and automated valuation model of VC preferred stock (available at www.vcvtools.com) to value various types of preferred stock and to visualize how term sheets split the values of the firm between entrepreneurs and VCs. Accessible, comprehensive, and assuming only basic knowledge of venture capital, this text offers essential guidance for successful VC and growth equity investing in any market.
Download or read book Risk Appraisal and Venture Capital in High Technology New Ventures written by Gavin C. Reid and published by Routledge. This book was released on 2007-09-06 with total page 258 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book is a 'crossover' treatment of quantitative and qualitative risk analysis within the setting of new high technology ventures in the UK. Reid and Smith have based their research on extensive fieldwork in patent-intensive, high-technology firms. This has included face-to-face interviews with leading investors, and is illustrated by two chapt
Download or read book Venture Capital at the Crossroads written by William D. Bygrave and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Venture capital (VC) has had a profound impact on the U.S and world economies. The landmarks of venture capitalism are the formation of the venture capital fund ARD in 1946 and the establishment of small business investment companies by the U.S. Small Business Administration in 1958. After a boom in the 1960s, the VC industry all but collapsed between 1970 and 1977. The VC industry revived in the 1980s and reached a peak in 1987 from which it declined. At the moment of its decline in 1990, the industry was radically altered and transformed and was at a crossroads from its recent shake-out. This book examines the state of the VC industry at this point in 1990, examining current trends, developments, and practices, and looking at future prospects for the industry, suppliers, and users of risk capital, as well as the nation's economy as a whole. The VC industry has been transformed by two changes. (1) New and specialized financial and investment strategies emphasize deal making, transaction crafting and closing, fee generating, and short-term gains. This "merchant capital" approach is oriented to investing in established firms, as opposed to the classic VC approach of providing equity financing in new, emerging, innovating, and technology-based firms. This change may be due to professionals entering the field from MBA backgrounds rather than business-building backgrounds. (2) The altered market has resulted in reduced opportunities, globalization, increase in available capital, and dominance of institutional money, and the VC industry is losing its classic company-building skills. The major virtue of the traditional VC industry, which has been a wellspring of innovation and great rewards, is the skills brought by the venture capitalists that add value in the firm's forming, building, and harvesting. Changes in the VC industry are seen in an explosion of investing activity, heterogeneity of industry structure, niche funds, declines in rate of return, and increased competition and shake-out. Examples of classic revolutionary industries financed by VC are the semiconductor, computer, and biotechnology industries. Some lessons from these industries are drawn. Lessons are also drawn from the case of the Winchester disc-drive industry, which represents a case of "capital market myopia." Historical VC returns have been in the 10% to 20% range, occasionally in the 20% to 30% range, and rarely higher. The main reason for the unsatisfactory returns on VC since 1983 has been the initial public offering (IPO) drought. The benefits and implications for the VC industry of syndicated investments are examined. The contribution of VC to economic development is explored in terms of internal and external factors. Some high-tech regions were not planned; some planned regional centers have failed. Three factors affect the flow of VC: investors who put up the money, entrepreneurs who form the company, and the venture capitalists. The value-added of classic VC investment lies in the guidance, contracts, know-how, and support of the backers. The relationship between the venture capitalist and management team critically affects the success of the venture. Also examined are relationships between flows of VC and public policy, capital markets, new technologies, and changes in industries. Most important in fostering VC are government policies. Since VC is vital element to entrepreneurship, the U.S. must actively foster classic venture capital by changing some national attitudes and policies in culture, education, and role of government, for which recommendations and suggestions are offered. (TNM).
Download or read book Equity Financing and Covenants in Venture Capital written by Karoline Jung-Senssfelder and published by Springer Science & Business Media. This book was released on 2007-12-08 with total page 301 pages. Available in PDF, EPUB and Kindle. Book excerpt: Karoline Jung-Senssfelder presents the first augmented contracting analysis, focusing on the interaction of both, financial instruments and covenants, in the creation of incentives to the contracting parties. With a focus on the German market, she integrates the findings of her model-based theoretical and survey-based empirical analyses to derive value-adding implications for an incentive-compatible contract design in the German venture capital market.
Download or read book Money Law Capital and the Changing Identity of the European Union written by Gabriella Gimigliano and published by Bloomsbury Publishing. This book was released on 2022-09-08 with total page 269 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book addresses 3 questions: is money a way to create a European Union identity? If so, which type of identity is this? And in what ways is the EU identity changing? The book brings together experts from a variety of backgrounds and academic approaches to analyse the law of money and payments on the one side, and the law of capital and investments on the other. The book is divided into 2 parts. Part I covers scriptural, electronic, and digital money. It analyses the European framework for payment services users, explores limits and challenges of the Banking Union, and looks at the project for a digital euro. Part II investigates the policy and regulatory drivers of the EU's changing identity, from the early modern roots of the European law of money and capital to the regulatory strategy set in the Capital Markets Union and the role conferred on venture capital; from the fintech-based developments of payment systems to the newly-established fiscal and monetary policies in the post-COVID phase. The book will be of interest to researchers, academics and policy makers in the fields of law and regulation, as well as political economy and political sciences.
Download or read book Stock Exchanges and Marketeer High Ground written by Matthias Kiefer and published by Matthias Kiefer. This book was released on 2023-03-13 with total page 151 pages. Available in PDF, EPUB and Kindle. Book excerpt: Watch out, there are two different types of company managers! This is not how a text book on Corporate Governance should begin. Modern corporations become independent from the influence of their shareholders. Dissatisfied shareholders sell rather than intervene. Stock exchanges allow disgruntled owners to tender their stock. On them, companies as wholes sell at premiums. The first known stock exchanges formed in Carthage (Tunisia), Sardinia and Sicily as early as in 600 BC. Phoenician seafarers’ wealth resulted from the markets that spread around the circular harbours. While ancient Roman neighbours benefitted from the Phoenician trade partners, their law diverged. In modern times, we witness an odd amalgamation of governance in Germany: Germany’s corporations have two legally separate governance boards. On the one hand, the functionality resulted from free markets: The most powerful directors must be separate to, and independent from, a company’s top management. Ancient Roman law disciplines German boards into obedience: The distinct types of leaders legally must divorce. Despite a larger population, Germany’s stock exchange today is less than half the volume of Britain’s. German banks not only fund their corporations. While western economies circle around stock exchanges, Germany’s small companies are subsidised and governed by the state banks. During recessions, Germany’s savers naturally insist on interest income, and force the country into austerity.
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 From Innovation to Cash Flows written by Constance Lütolf-Carroll and published by John Wiley & Sons. This book was released on 2009-07-01 with total page 943 pages. Available in PDF, EPUB and Kindle. Book excerpt: Praise for From Innovation to Cash Flows "Critically important topics for all entrepreneurs, new and experienced. Collaboration, intellectual property, and funding are described with depth and thoughtfulness. From Innovation to Cash Flows provides both the theoretical structure and the rich examples to serve as a great reference. Not to be missed!" —Cheryl A. Fragiadakis, Head of Technology Transfer and Intellectual Property Management, Lawrence Berkeley National Laboratory "From Innovation to Cash Flows is a unique book that covers many of the essentials to be successful as a biotechnology or high-tech entrepreneur. The combination of theory and practical examples adds direct business value. This comprehensive work will prevent any starting venture from making costly mistakes." —Jeroen Nieuwenhuis, PhD, MBA, Corporate Entrepreneur, Magnotech Venture, Philips Healthcare Incubator "Truly exhaustive in its coverage of all the different aspects of managing high-technology innovations, this book constitutes an invaluable resource for technology entrepreneurs." —Juhana Rauramo, Partner, Bio Fund Management Ltd. "From Innovation to Cash Flows is a wellspring of insights and inspiration for anyone with a desire to start up a high-tech venture. The reader is guided step by step through the twists and turns of strategy, contract law, intellectual property rights management, and strategic partnering. A global team of experts from law, science, and business collaborated to write this book; their pooled know-how and collective experiences shine through. The result is highly recommended. Every aspiring entrepreneur with a scientific bent will want to own this book for his or her own library." —Laura Cha, Deputy Chairman, The Hongkong and Shanghai Banking Corporation Ltd. "Alliances often are a vital component of successful high-tech ventures. Through its unique blend of sound management theory and wise business and legal advice, this book shows high-tech entrepreneurs how to build innovative business models based on strategic collaboration with other firms." —Xavier Mendoza, Deputy Director General, ESADE, Ramon Llull University, and former Dean, ESADE Business School, Spain "This book is distinctive because it tells you how to turn your idea into a profitable business—a combination of savvy business advice and extensive legal documents that is original. This is a book to be read, and then revisited. You will want to come back to it time and again for references, for sample documents, and for sage advice on how to take the next step." —From the Foreword by Henry Chesbrough, Adjunct Professor and Executive Director, Center for Open Innovation, Haas School of Business, UC Berkeley, and Karl S. Pister, Dean and Roy W. Carlson Professor of Engineering Emeritus, UC Berkeley
