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The Pricing of IPO by Investment Banks and Venture Capital: A Theoretical Model  [PDF]
Huanran Kong
Open Journal of Social Sciences (JSS) , 2018, DOI: 10.4236/jss.2018.610017
Abstract: The venture capitalists provide supervision and certification service for shareholding enterprises, which reduce the information asymmetry and attract more high quality investment banks. Thus, the price is close to the market price when the enterprise enters the market and under-pricing is avoided thereby. Based on the supervision and certification hypothesis, this paper builds a pricing model of investment banks and venture capital to explain the pricing mechanism of investment bank, investment risk pricing mechanism and the causes of underpricing.
Characteristics and drivers of venture capital investment activity in Romania  [PDF]
Theoretical and Applied Economics , 2012,
Abstract: The present paper aims at characterising the venture capital market and identifying factors affecting the venture capital investments activity in Romania in the period 2000-2010. With a view to assessing the intensity of manifestation of various factors on the supply and demand of venture capital we use an econometric model of macroeconomic variables already tested in the literature. We consider, however, that we bring contributions to the approach, by analysing the features of the venture capital market in Romania and impact factors, our work being, at the same time, support in assessing the types of decisions to be adopted by policymakers to the formation of an authentic market and stimulating innovation. Our results indicate that the total R&D intensity is the main determinant of the venture capitals invested in this period in the two phases (for early stages and expansion). A significant incidence, mainly on the supply side, also shows the annual long term real interest rate, while the market capitalisation, the effective marginal tax rate on corporate income, the annual inflation or unemployment rate do not impact on the venture capital. Our recommendations, in terms of formation and development of the venture capital market, look as a priority, strengthening the demand for resources, respectively encouraging of enterprises to innovate, creating of conditions for the supply to be manifested in the seed and start-up stages and the compatibilization of the need for resources with prudential rules by adapting regulations for institutional investors.
Challenges of the Knowledge Society , 2013,
Abstract: Created in the United States of America, Venture Capital is an asset class which attracted recently the attention of the policy makers all over the world. But the concept is still not clearly defined and understood. This paper attempts at introducing in the concept, its characteristics, and reviewing some of the benefits Venture Capital investments can bring at both the macroeconomic level, by looking at the correlation with the economic growth, and at the microeconomic level, for the portfolio companies.
Research on the Evaluation and Control for the Non-systematic Risks of Venture Capital Investments Based on the Unascertained Measure

WAN Yu-cheng~,

系统工程理论与实践 , 2004,
Abstract: An index system for evaluating the non-systematic risks of venture capital investments is established on the basis of analysing the factors affecting the non-systematic risks of venture capital investments. An unascertained measure method for evaluating the risks of venture capital investments is presented by applying the unascertained measure theory. The method is suitable for evaluating the risks of venture capital investments. It is perfect, and the evaluating results are reasonable. The model for controlling the risks of venture capital investments is established on the basis of the results of the unascertained measure evaluation of venture capital investments. An example of practical application is given to show the effectiveness of this method.
Venture Capital and Innovation in Europe  [PDF]
George Geronikolaou, George Papachristou
Modern Economy (ME) , 2012, DOI: 10.4236/me.2012.34058
Abstract: In this paper we search for evidence signifying whether VC activity is demand or supply stimulated. Namely, we examine whether innovation and entrepreneurship are fostered by Venture Capital (VC) investments or whether innovative entrepreneurship is a precondition of a VC involvement. Based on a European panel of VC investments, we test the direction of causality between VC and innovation (proxied by annual patent applications at the European Patents Office). We present evidence indicating that causality runs from patents to VC suggesting that, in Europe, innovation seems to create a demand for VC and not VC a supply of innovation. In this sense, innovative ideas seem to lack more than funds in Europe. We explain our findings on the basis of information asymmetry issues and irreversibility considerations of VC investments.
Research on the Allocation of Cash Flow Rights and Control Rights in Venture Capital Financing Contract  [PDF]
Yunfei Li, Zongfang Zhou
Modern Economy (ME) , 2012, DOI: 10.4236/me.2012.31008
Abstract: In view of the allocation of cash flow rights and control rights in venture capital firms, a financing contract model is set up by introducing the entrepreneur’s self-owned capital in this paper. This paper analyzes the affecting factors and mechanism to the allocation of cash flow rights and control rights, shows the relationship between cash flow rights and control rights, gives the bargain intervals of the entrepreneur and the venture capitalist about the allocation of cash flow rights and control rights. It is shown that the more the entrepreneur’s self-owned capital and the higher the venture capitalist’s evaluation of the venture project and the ability of the entrepreneur, the fewer cash flow rights and control rights the venture capitalist will want; the relationship between cash flow rights and control rights of the venture capitalist is complementary but not corresponding, so the result provides a theoretical explanation for Kaplan and Stromberg’s empirical researches about the disproportion between cash flow rights and control rights in venture capital firms.
The Impact of Venture Capital on GEM Companies’ Deviant Strategy  [PDF]
Huihui Zhang
Open Journal of Accounting (OJAcct) , 2018, DOI: 10.4236/ojacct.2018.71003
From the perspective of resource-based theory, agency theory and signal transmission theory, this paper examines the impact of venture capital on the deviant strategy of enterprises by studying the data of GEM listed companies from 2009 to 2016. The study finds that there is a smaller deviant strategy in companies supported by venture capital than not supported. Through the further analysis of venture capital, this paper finds that the impact of specific characteristics of venture capital on corporate deviant strategy is more significant: private and state-owned background characteristics of venture capital, compared with foreign investment background characteristics of venture capital, the companies supported by the former two own smaller deviant strategy; the enterprise supported by venture capital of alliance investment characteristics, phased investment characteristics, late entry into the enterprise characteristics owned smaller deviant strategy.
Exploring the Effect of Venture Capital Instruments and Control Mechanisms on Growth of Venture Capital Fund: Empirical Evidence from Ghana  [PDF]
Suweiba Sulemana, Haibo Chen
Open Journal of Business and Management (OJBM) , 2019, DOI: 10.4236/ojbm.2019.71013
The study investigated the effect of venture capital instruments and control mechanisms on the growth of venture capital fund for 100 venture capital firms in Ghana by employing a stepwise multiple linear regression. We found a positive and significant relationship between growth of venture capital fund and the two-distinct set of independent variables (venture capital instruments and control mechanisms). The variables, convertible redeemable preference, preferred equity and debt, and preferred and common equity contribute significantly as venture capital instruments to the growth of venture capital, while conversion control right, performance option and warranty option were identified as control mechanisms that significantly affect the growth of venture capital.
Non-capital Value-added Services and its Affecting Factors in Venture Capital Based on Multi-dimensional Screening

- , 2015,
Abstract: 为了从非资金价值增值服务的视角,给出创新企业家甄选风险投资机构的依据,本文建立风险投资多维信息甄别模型,证明了风险投资机构非资金价值增值服务的努力程度受价值增值服务边际成本和不同服务水平的边际成本差异影响。最后通过情景分析和算例分析进一步效验了风险投资机构非资金价值增值服务努力程度的影响因素及其途径,为创新企业家甄别风险投资机构的服务水平提供了依据。
To present the basis of venture capitalists selection by innovative entrepreneurs from the perspective of non-capital value-added services, the paper established a multi-dimensional information screening model, which showed that the degree of non-capital value-added services was affected by the value-added marginal cost and adverse selections. Finally, the influence factor was further verified by scenario analysis and case study, which provided entrepreneurs with the identification basis of service level among venture capital organizations.
Research on Mechanism of Application and Exit of Venture Capital in University Science Park in China  [cached]
Meixia DONG
International Business and Management , 2011, DOI: 10.3968/j.ibm.1923842820110302.1z0594
Abstract: Venture capital in the investment of University Science Parks (USP) in China is low and has difficult to play a leading role. Also venture capital can’t be integrated with projects and is in a poor efficiency. Adopting diversified methods to build a network of using venture capital and establishing a scientific evaluation system to construct a management system for venture capital ensures the efficient use of venture capital. Since recycling of venture capital promote the development of the USP, research on the exit mechanism of venture capital is very important. In order to make the venture capital exit smoothly, the USP should use appropriate introducing way and select the best exiting way and time and train venture capitalists. Key words: University science park; Venture capital; Efficient utilization; Exit mechanism
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