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The purpose of this study is to investigate, by use of relevant robust econometric modelling, physical capital and human capital, and their impact on growth in Indonesia for policy analysis. The Auto Regressive Distributed Lag (ARDL) by Pesaran and Pesaran (1997) were chosen for supporting the relationship analysis. The important finding for policy analysis is that human capital appears to be a continuing factor shaping Indonesia’s growth, along with physical capital accumulation, with particularly strong effects for human capital arising from tertiary education. Physical capital has shown a strong and significant impact on the growth in the long run and indicates that Indonesia needs long term investment to generate growth. Such investment has distinction which related to sustainable operation such as infrastructure, sophisticated services, and venture capital. Consequently, it requires high skill labour supplied by tertiary education institutions. A further development of tertiary education next to enhancement of investment environment in manufacture and service sector should be set as priority programs in inducing growth.

Female support of other women has been put forth as a remedy to the gender gap across many domains. Yet the potential costs associated with gender homophily are not well understood. We propose that homophily aggravates negative gender bias in evaluation. Focusing on the context of entrepreneurship, we theorize that future investors will discount a female entrepreneur’s competence as the key factor in an early-stage investment decision, when the investment comes from a female investor. Consequently, female-backed female entrepreneurs may struggle to raise additional funds from new investors. In a field study of venture-backed startups, we find that firms with female founders who received funding from female rather than male VCs are two times less likely to raise additional financing. We find no equivalent investor gender effect for male-founded firms. In an experimental study, we find that pitches by female-backed female entrepreneurs receive lower evaluations compared with all other pitches, and that this is driven by perceptions of entrepreneur competence. Our findings suggest that well-intentioned calls for women to invest in women not only place an undue burden on female investors, but may also undermine the long-term success of female entrepreneurs. Supplemental Material: The e-companion is available at https://doi.org/10.1287/orsc.2022.1594 .

Startups constitute an essential component of a working market economy and foster economic growth, employment as well as technological progress. However, managing and leading companies at an early growth stage poses an enormous challenge, as investment failure amounts to approximately 75%. That said, receiving venture capital is all but an easy task and only 1% of investment opportunities considered qualify for an investment. Against this backdrop, the aim of this article is to identify particular management and leadership skills that attract venture capital more successfully than others do. The investigation finds that management-related criteria appear to be the most important factor for Swiss venture capitalists. Especially the track record of founders and the diversity of backgrounds within the startup’s core team were considered relevant.

Small and startup IT (SSIT) firms are responsible for a lot of important IT innovations in the IT industry. Several SSIT firms are then bought by larger, more established IT companies that want to drive their innovation, add new product and service lines, or limit competition. However, because SSIT firms are often small and difficult to find, it is hard for many of them to show acquiring firms how good they are. We discuss three “information chasms” to explain why it is difficult for SSIT firms to show how good they are, and we suggest that the SSIT firms that successfully cross these “information chasms” can become acquired for a higher price. Using a dataset of over two hundred acquisitions of SSIT firms in the IT industry from the mid-2000s to the mid-2010s, we find that our hypotheses are confirmed. When SSIT firms invest in activities that eliminate uncertainty about the firm’s knowledge resources and promote the firm, they are acquired at a higher price. In addition, purchasers pay a premium for SSIT firms that continue to utilize mature IT during acquisitions.

The Behavioral Theory of the Firm suggests that performance below aspirations triggers problemistic search that can lead to risk taking. This prediction has received empirical support from most studies on the topic. However, this literature has typically focused on the internal determinants of firm search and risk-taking behavior and given little attention to the influences of social networks in which firms are embedded. To this end, we incorporate the network embeddedness perspective regarding firms’ network positions and their roles in firm decision making. We suggest that a firm’s search behavior is jointly directed by its performance feedback and network positions. Specifically, network brokerage and centrality play important yet distinct roles in guiding firm search behavior by differentially shaping the direction of problemistic search: high brokerage directs problemistic search to high-risk solutions, whereas high centrality directs problemistic search to low-risk solutions. Our theoretical predictions receive general empirical support based on analyses using longitudinal data from the Chinese venture capital industry. Our approach incorporates the crucial role of network structures into the problemistic search model and works toward building a problemistic search theory of the embedded firm.

Space debris is an increasing problem. Unlike terrestrial debris, there are no natural systems, other than exponentially diminishing atmospheric drag, to self-correct. This creates a self-perpetuat...

Many innovative products are designed to satisfy the demand of specific target consumers; thus, the innovators will inevitably compete with each other in the product market. We investigate how a profit-maximizing principal should properly allocate her limited resources to support the innovations of multiple potentially competing innovators. We find that, as the available resources increase, the optimal diversification of investment may first increase and then decrease. This interesting nonmonotone pattern is driven by a trade-off between the risk of innovation failure and rent dissipation because of competition. Using this framework, we also analyze a nonprofit principal seeking to maximize the total number of successful innovations, the probability of at least one innovator succeeding, consumer surplus, and total social welfare. A nonprofit principal tends to invest more diversely compared with a for-profit counterpart. This paper was accepted by Sridhar Tayur, entrepreneurship and innovation.

Start-up accelerators have attracted increasing attention from start-ups in recent years. However, little is known about how they interact with start-ups and investors, how they prioritize a wide variety of their services, and how macro-level factors affect their performance. We use a game-theoretic approach to study mutual effects between an accelerator, a venture capitalist (VC), and start-ups. In the model, the accelerator selects start-ups and invests in them. During its program, it provides intensive mentorship for the selected start-ups and screens them to determine whether or not they are successful. Finally, it introduces successful start-ups to the VC to obtain financing for their ideas. Our results indicate that 1) the most vital role of an accelerator is its screening services. 2) Given limited resources of accelerators, prioritizing their services is the key to their efficacy. Screening, mentorship, and seed investment services possess the first, second, and third priorities, respectively. 3) Although accelerators are anywhere beneficial, macro-level heterogeneity of entrepreneurial ecosystems is associated to their efficacy. Their efficacy is higher (lower) in less (more) developed regions. 4) Institutional reforms targeting mentoring or entrepreneurial communities are unexpectedly detrimental to the efficacy of accelerators, while they may enhance start-ups’ equilibrium willingness to participate.

We apply advances in analysis of mixed frequency and sparse data methods to estimate ``unsmoothed'' private equity (PE) Net Asset Values (NAVs) at the weekly frequency for individual funds. Using simulations and a large sample of buyout and venture funds, we show that our method yields superior estimates of NAVs relative to a simple approach based on comparable public asset and as-reported NAVs. The market beta of an average buyout [venture] fund, around 1.05 [1.20], is notably lower than previous studies suggest. The overall risk of a median buyout [venture] fund is 34% [40%] per year if measured in terms of the standard deviation of total returns, an increase of 10 [13] percentage points relative to the series based on as-reported NAVs. However, we find significant variation in systematic and idiosyncratic risk within and across vintages, and the risk-return profile based on the samples from the 1990s is not representative of currently operating funds. Our method easily accommodates additional data, such as individual holdings details, and related M&A activity. As an example application, we show how the cross-section of appraisal biases and nowcast errors evolved around the 2008 Financial crisis.

Because of the recent surge in the number of unicorns and their role in spurring entrepreneurship and social impacts, venture capitalists, entrepreneurs, and regulators are concerned about how startup firms are valued. This is due to a lack of financial and historical information about startups as well as the need to understand their disruptive technological aspects. The length of observations is 2008–2018. The study uses the average value of variables for cross-sectional estimations. Our study investigates whether the types of recent technologies adopted by startups could serve as key factors to be used in startup valuations. Using a sample of 4903 startup in 13 subregions, we find that financial information (revenues) and nonfinancial information (social media) as well as sectoral and technological differences influence startup equity valuation. Technologies that involve big data, clean tech, mobile and augmented reality are prominent equity valuation premiums, regardless of the subsectors in which the startups originate. In addition, we find that e-commerce and mobile and big data are effective technologies for startup firms to employ for accumulating short-term capital.

We find a negative relation between democracy and initial public offering (IPO) underpricing for a sample of 23,050 IPOs across 45 countries. The effect of democracy on underpricing is weaker for IPOs audited by Big 4 auditing firms, backed by venture capital firms, and with better disclosure specificity of use of proceeds. Democracy exerts a larger influence on underpricing for firms with higher agency problems, in countries with weaker institutional quality or shareholder protection, and during periods of high investor sentiment or economic policy uncertainty. Overall, our results highlight the importance of democracy in reducing IPO underpricing around the world.

There is a significant lack of representation for women in the medical field, whether that be the entrepreneurs representing healthcare companies, researchers conducting studies, or even in participants used for clinical trials. My interest in women’s health and in this disparity motivated me to choose my thesis topic of researching Venture Capital and its impacts on women’s health. While this interest was not the motivating factor for why I chose my technical topic of working on developing an in vitro model to study cerebral cavernous malformations, being in a research lab did inspire certain questions I asked while conducting research. By being exposed to academic research for the first time, it motivated me to look into topics such as the percentage of researchers that are women, how many grants were awarded to female researchers, and what percentage of those female researchers were likely to be published as compared to their male counterparts. Having the ability to ask questions such as those allowed me to find credible sources that further developed my thesis. Cerebral cavernous malformations (CCM) is a genetic vascular disease that results in leaky, malformed blood vessels (lesions) in the brain. KRIT-1 (or CCM-1) is one of three genes responsible for the disease. While KRIT-1 has been confidently linked to CCM, its role in the cell signaling pathways that regulate endothelial behavior and morphology is not well understood. First, we simulated the conditions of CCM lesion formation with a parallel-plate flow chamber, using at first only wildtype cells and recently cells where KRIT-1 expression has been knocked down. In these flow experiments we show that endothelial cells will align under flow. We used silencing RNA (siRNA) to knock down KRIT-1 protein expression for use in both flow chamber experiments and in a Western blot to confirm that the protein was in fact knocked down. Additionally, we created the first iteration of a flow system that included a hydrogel model of a channel, in which we worked to implant cells. This flow system is the first step towards creating an in vitro model that will one day allow for this disease to be studied and allow for therapeutics to be developed. The success of a start-up company in its early stages is heavily dependent on the ability of the company to raise funds. Those funds typically come from Venture Capital investments. Through my STS research I have investigated the investment criteria used by venture capitalists, and how that criteria leads to the underfunding of women’s health companies. Women’s health products are severely underfunded compared to men’s health products. I show that the vague language used in investment criteria leaves room for personal gender biases of venture capitalists to influence decisions made by the firm. Venture Capital is a male-dominated industry and the inherent biases held by those investors hurts the success of female entrepreneurs, especially those women representing women’s health companies. Through this research I show that there is an issue within the Venture Capital system, specifically with the investment criteria. This criteria needs to be modified in order to reduce the potential for gender bias to dominate decision making. Working on both my STS thesis and my technical project exposed me to two different phases of medical development that is valuable for my future work of medical product development. It is not typical to be able to gain the experience of early phase experiments and prototyping for a project while simultaneously researching the process that start-up companies go through while trying to raise funding to further develop their products. In the future I anticipate I will have to prototype a medical device, hopefully in women’s health, in its early stages while also working towards acquiring funding for my project. My deep dive into Venture Capital investment processes will allow me to anticipate future challenges and necessary steps in my career.

In a dual risk model, the premiums are considered as the costs and the claims are regarded as the profits. The surplus can be interpreted as the wealth of a venture capital, whose profits depend on research and development. In most of the existing literature of dual risk models, the profits follow the compound Poisson model and the cost is constant. In this paper, we develop a state-dependent dual risk model, in which the arrival rate of the profits and the costs depend on the current state of the wealth process. Ruin probabilities are obtained in closed-forms. Further properties and results will also be discussed., Comment: 20 pages, 3 figures

Resumo O objetivo principal do presente estudo é entender quais critérios influenciam o processo decisório de seleção das melhores startups em inovação por um fundo de venture capital, na visão dos investidores, profissionais de fundos de venture capital e empreendedores de startups entrevistados. Apresentamos algumas ideias sobre as características das principais cidades que promovem inovação e os ideais do modernismo e do modernismo crítico (Habermas) e do pensamento criativo (Einstein). As entrevistas confirmaram diversas relações entre as hipóteses encontradas na literatura sobre teoria organizacional. Achados como os ambientes pós-burocráticos (Heckscher) e a proposta de adhocracia de Mintzberg (1995), assim como a Teoria da Escolha Racional de Herbert Simon (1987) e seus estudos sobre o processo decisório nas organizações pelo reconhecimento de padrões cognitivos pelos decididores, foram corroborados pela análise das entrevistas. Foram elaboradas entrevistas semiestruturadas (nove, no total) com profissionais de fundos de venture capital, empreendedores de startups e investidores com alguma experiência no mercado em questão. A importância do tema resiliência organizacional também foi ressaltada, e, no fim, sugere-se o estudo sobre a abertura de novos espaços de criação de startups e inovação, como a Station F, em Paris, França, o espaço La Nave, em Madri, e o projeto Porto Maravilha, no Rio, e de centros urbanos de inovação, como a Vila Olímpia e a Avenida Paulista, em São Paulo. Resumen El objetivo principal del presente estudio es comprender cuáles son los criterios que influyen en el proceso de toma de decisiones de selección de las mejores startups en innovación por parte de un fondo de capital de riesgo, a juicio de los inversores, profesionales de fondos de capital de riesgo y emprendedores de startups entrevistados. Presentamos algunas ideas sobre las características de las principales ciudades que promueven la innovación y los principios del modernismo, del modernismo crítico (Habermas) y del pensamiento creativo (Einstein). Las entrevistas confirmaron varias relaciones entre las hipótesis encontradas en la literatura sobre teoría organizacional. A través del análisis de las entrevistas, se corroboraron hallazgos como los entornos posburocráticos (Heckscher) y la propuesta de adhocracia de Mintzberg (1995), así como la teoría de la elección racional de Herbert Simon (1987) y sus estudios sobre el proceso de toma de decisiones en las organizaciones a través del reconocimiento de patrones cognitivos por parte de los decisores. También se destacó la importancia del tema de la resiliencia organizacional. Finalmente, se sugiere estudiar la apertura de nuevos espacios para la creación de startups e innovación, como la Station F, en París, el espacio La Nave en Madrid, el proyecto Porto Maravilha, en Río de Janeiro, y de centros urbanos de innovación como Vila Olímpia y Avenida Paulista, en São Paulo. Abstract This study aims to understand the criteria that influence the decision-making process of selecting startups that have innovated successfully. In this article, this kind of selection was made by venture capital enterprises. We studied the view of the investors, venture capital professionals, and startup entrepreneurs interviewed. We present the actual global characteristics of the main cities where innovation takes place and the modernism and critical modernism aspects and creative thinking beliefs (Einstein, Habermas). The qualitative research was carried out using an exploratory approach and case study methodology based on semi-structured interviews (nine in total) with professionals from venture capital funds, startup entrepreneurs, and investors. The interviews confirmed several relationships between theories found in the business management literature. Findings such as post-bureaucratic environments (Heckscher), Mintzberg’s (1995) Adhocracy, and Simon’s decision-making process (1987) for pattern recognition were corroborated by the analysis of the interviews. We present some initiatives for innovation such as Station F in France, El Espacio La Nave, Madrid, the Project Porto Maravilha in Rio, and Vila Olimpia e Paulista avenue, São Paulo.

Excessive use of nitrogen fertilizer in China and its adverse effects on agricultural production have been a national and global concern. In addition to massive public initiatives to promote sustainable farm practices, grass-rooted innovations are emerging in the niche, many of which take the forms of information and communication technologies (ICT) and digital services. This study examines the effects of ICT-based extension services provided by an entrepreneurial startup on adopting sustainable farming practices. We found no significant reduction in N-fertilizer use for wheat production. But the ICT-based services promoted farmers to adapt N-fertilizer use towards site-specific management. The business model of the entrepreneurial venture faces great challenges in becoming participatory and financially sustainable.

The article examines the relationship between the innovative development of the country's economy, the amount of venture funding for innovation projects, investment freedom and the tax system in the country using an empirical study of their causality and the impact of these factors on each other. The correlation is set at 0,59. An assessment of each of the factors on the level of innovative development of the country was made. Indicators for 16 European countries were taken for analysis.The most stable relationship is found between the country's innovative development and investment freedom. The correlation between innovative development and the volume of venture financing of innovative enterprises, as well as between innovations and features of tax policy in the country is somewhat smaller, but still significant. It is established that the availability of venture capital and the development of venture capital in a country will have a tax policy (special taxation, reduction of capital gains tax). It is established that the development of venture business in the country is important because it provides commitment to the innovation sector of long-term financial resources of institutional and individual investors.

Past research has produced contradictory insights into how prior collaboration between organizations—their relational embeddedness—impacts collective collaborative performance. We theorize that the...

In recent years, the world has witnessed a soaring inflow of capital into sustainable investment. This is particularly so following the devastating COVID-19 pandemic. However, while a growing size of literature has deliberated debt financing in sustainable investment, less ink has been spilt on equity financing in this space, and even less scholarship has explored the role of government and law in facilitating sustainable Venture Capital (“VC”) funds. This paper proposes a dualist approach towards facilitating the development of sustainable VC funds encompassing a contractarian strategy with government support. The contractarian approach includes effective contracting covering the entire VC cycle in sustainable investment. It aims to provide strong incentives for all participants, ranging from investors, entrepreneurs, fund managers, to credit-rating agencies and evaluation firms. In the same vein, this paper seeks to craft a role for regulators that facilitates the simultaneous availability of several factors in a sustainable VC cycle (i.e., fund-raising, investment and exit). In the fund-raising stage, governments may play an active role by expanding the source of financing for sustainable VC funds and enacting detailed and targeted legislations. For the VC investment stage, sustainable VC funds should make full use of its strong corporate governance rights and monitoring to ensure that start-ups deliver their sustainable promises. In the exit stage, a specialized sustainability board is strongly recommended to offer viable exit options, together with greater standardization and comparability in sustainability information disclosure, and regulatory support for trustworthy sustainable impact rating agencies to sustain investor confidence.

Knowledge Intensive Enterprises (KIEs) constitute one of the most promising forms of entrepreneurial activity that can boost economic growth. Especially within the context of Innovation Ecosystems (IEs), KIEs play a central role in modern innovation research. The Covid-19 pandemic highlighted strongpoints and deficiencies in the broader ecosystems, the companies themselves, and most importantly, their founders and employees. Despite the external hindrances, many enterprises found growth driven by their ecosystems’ dynamic and their staffs’ capabilities. Combining insights from a quantitative survey, with actual growth data in the context of a Venture Capital (VC)-driven IE, we argue that enterprise profile - as defined by its innovation capability and its members’ personal, organizational, and demographic characteristics – affect KIE growth potential, and actual growth. In addition, we argue that both enterprise profile, as well as KIE growth, affect its members’ emotional reaction to the Covid-19 crisis, in terms of worry, hope, and optimism.

A high level of information asymmetry is characterizing for venture capital investments making new information about entrepreneurial companies especially valuable for a venture capitalist’s valuation process. This paper uses text classification and text mining methodology to extract structured data about capital allocation plans in a unique sample of 1,550 European funding rounds that serves as proxy for the private informational updates shared with investors by entrepreneurs. We show that venture capitalists incorporate the content and specificity of information into their valuation process. Further, results confirm that the value of new information is dependent on the prevailing level of information asymmetry.

There is often considerable anxiety and conflicting advice concerning the benefits of presenting/being evaluated first. We thus investigate how expert evaluators vary in their evaluations of entrepreneurial proposals based upon the order in which they are evaluated. Our research setting is a premiere innovation fund competition in Beijing, China, where the prize money at stake is economically meaningful, and evaluators are quasi-randomly assigned to evaluate written grant proposals without the possibility of peer influence. This enables us to credibly recover a causal position effect. We also theorize and test how heterogeneity in evaluators’ prior (context-specific) judging experience moderates position effects. Overall, we find that a proposal evaluated first requires total assets in the top 10th percentile to merely equal the evaluation of a proposal in the bottom 10th percentile that is not evaluated first. Firm and evaluator fixed-effects models yield consistent findings. We consider evaluation design elements that may mollify these position effects in the discussion section. This paper was accepted by Sridhar Tayur, entrepreneurship and innovation.

Limited partners allocate capital into venture capital funds with the expectation of a risk-return profile matching the fund's investment style in terms of startup investment stage, location and industry. This paper draws a connection between style drifts in these three dimensions and the connected risk-taking attitude of the general partner. By analyzing a sample of 31,521 investments with respect to the motivation for style drifts, this paper seeks to answer whether style drifts are deliberate risk-shifts or happen out of competitive pressure. The results suggest that venture capitalists increase risk, when they have strong past performance and public markets are bullish in order to make the most of the balance of compensation and employment incentives. This balancing most likely constitutes an agency conflict between limited partners and general partners. Further, results show that most risky style drifts have a negative impact on the probability of a successful exit even after controlling for performance persistence and endogeneity. Finally, the findings show that aggregate style drift has a negative effect on a fund's performance measured as its exit rate.

Equity crowdfunding has become a viable alternative to the traditional forms of financing technology startups. This survey-based two-study article aims to shed light on the prevalence of crowd equity investors’ postinvestment activities and the antecedents to these engagement activities. Our first study finds that most crowd equity investors engage with the startups in which they invest in some way. While the majority engage in low-involvement activities (e.g., word of mouth), a smaller number of crowd equity investors also engage in high-involvement activities (e.g., strategic advice). Our second study reveals that engagement in these activities is driven by investment-, investor-, and proximity-related factors. In particular, the amount of investment—despite its smallness compared with that in the traditional forms of funding—is a reliable antecedent of crowd equity investors’ engagement in postinvestment activities. Furthermore, age and geographic proximity are positively associated with low-involvement activities, whereas intrinsic motivation and personal proximity are positively linked to high-involvement activities. By providing insights into the prevalence of postinvestment activities in equity crowdfunding and their antecedents, this article contributes to the debate on the potential of equity crowdfunding to complement or even replace the traditional forms of funding technological innovation.

In an extension of the entrepreneurship literature's long-standing emphasis on the role of human capital in attracting startup funding, we propose that tech-based startup founder’s ambidexterity and experience-based human capital have direct and interactive effects on new venture funding. Drawing on the human capital perspective, we consider ambidexterity an ability-based human capital that helps entrepreneurs navigate new venture environments and carry out entrepreneurial tasks more effectively. We compiled a unique dataset by gathering data from Crunchbase, social media sites, and entrepreneur’s online communications posted on Reddit. On the basis of text analyses on 115 startup founder’s public discourse using a purpose-built dictionary to measure ambidexterity, our empirical results confirm that founder ambidexterity has positive effects on tech startup funding and that these effects are moderated by founder’s experience-based human capital in terms of prior career experience and startup creation experience. This finding is complemented by semistructured interviews with venture capitalists providing evidence that funders consider founder ambidexterity in their investment decisions. Implications for literature and practice are discussed.

In this study, we are the first to examine the role of domestic and foreign venture capital and private equity firms (VCPEs) in Indian firms. We find robust evidence to indicate that portfolio firms backed by foreign VCPEs incorporate effective governance structures in the post-IPO period. Specifically, these firms are associated with smaller, more independent and gender-diverse boards. Furthermore, our results suggest that foreign VCPEs continue their association with their portfolio firms in the post-IPO period by nominating directors to the boards. Our results also suggest that portfolio firms backed by foreign VCPEs are associated with better long-term operating performance and profitability. We note that this positive effect is exacerbated by the presence of VCPE nominated directors on the boards. Collectively, our results provide credence to the view that good governance practices are key to long term success of a business, especially in economies that may lack good legal systems, developed financial markets and a variety of alternative investment opportunities and where developing trust between parties involved in a transaction is more important.

Despite the increasing of research papers, methodological developments, and applications of Deep Learning algorithms, a paper on the history of these models is still missing. In this study, it is provided a biography of Deep Learning, starting from its origin to this (very) moment considering the most relevant results. The history of Deep Learning is particularly interesting; indeed, as probably never before, it was born out of the interaction of different expertise, and now we are often in touch with technologies based on these algorithms. Indeed, the first definition of neuron has been possible only for the synergy between a psychologist/neuro-anatomist, McCulloch, and a mathematician, Pitts. Together they laid the foundations for what we now call Deep Learning. In this paper, the history with the most significant intuitions is shown, as, to our knowledge, it has never been done in previous literature. This work aims at covering this lack, presenting a chronological history of the evolution from the first neuron to today’s sophisticated Evolutionary Computing, and providing the most relevant references for each addressed issue.

Using a unique dataset, we examine financial performance, arid venture capital involvement in 167 MBOs exiting through IPOs (MBO-IPOs) on the London Stock Exchange, during the period 1964 -1997. VC backed MBOs seem to be more underpriced than MBOs without venture capital backing, based on average value-weighted returns. MBOs backed by highly reputable VCs tend to be older companies, and exit earlier than MBOs backed by less reputable VCs. The results contradict 'certification' and 'grandstanding' hypotheses supported by US data (Meggirison arid Weiss, 1991; arid Gompers, 1996, respectively). We found no evidence of either significant underperformance, or that VC backed MBOs perform better than their non-VC backed counterparts in the long run. However, MBOs backed by highly reputable venture capital firms seem to be better long-term investments as compared to those backed by less prestigious venture capitalist firms. The results remain robust after using different methods to measure performance, and after controlling for sample selectivity bias. © Blackwell Publishing Ltd. 2005.

Dem deutschen Innovationssystem werden viele Defizite vorgeworfen: zu wenig Engagement bei der Digitalisierung, zu wenig Wagniskapital und zu wenige Unternehmensgründungen. In diesem Beitrag wird gezeigt, dass sich mit den sogenannten Company Buildern eine Form von Wagniskapital herausgebildet hat, die an den Institutionen des deutschen Innovationssystems anknüpft. Die Company Builder erleichtern den Gründer:innen den Einstieg am Markt und vielen traditionellen Mittelständlern den Kontakt mit der Startup-Welt. Dieser erfolgreiche und beschäftigungsorientierte Pfad sollte durch die Gründungs- und Wagniskapitalpolitik unterstützt werden.

Venture capital (VC) plays a pivotal role in the survival and success of high-growth startup firms. Yet there is significant discretion in how such investors determine which entrepreneurs warrant their capital and mentorship. This has lead to insular investment decisions that venture capitalists themselves are sounding the alarm on. One of the most alarming areas of disparity is the gap between female and male entrepreneurs that receive venture capital backing for their startup ventures, with female founders accounting for only 10% of such startups. Part of the problem is that venture capital investors have to grapple with significant technological and business uncertainty as they make their investment decisions, leading them to default to social cues, familiarity, and stereotypes to guide their intuition. Prior research has found that this leads investors to more positively assess the quality of startups pitched by males. Given this well-documented finding, this study aims to take the next step forward, in understanding whether the use of metrics and quantification in a startup pitch can close the gap between how female and male entrepreneurs are perceived. The objective is to take a first step in exploring the tools and mechanisms that might allow disadvantaged entrepreneurs to overcome entrenched biases, and get a fair sounding board for their ideas.

The present work is a registered report focused on a replication and extension of the findings in Dimov and Shepherd (2005). Our work tests the hypotheses from the original article in an expanded industry context and with an updated sample. The wider sample will include low- and medium-tech industries, and an expanded time frame as opposed to the original sample based on the high-tech wireless industry in a 5-year span. We will test using the same estimation technique (hierarchical regression) from the original article and expand on it by using multivariate regression and negative binomial analyses to accommodate the count nature of the outcome variables. We expect that this extension will support the finding that general human capital has a significant effect on success (home-runs) measured through Initial Public Offerings (IPOs). Furthermore, we anticipate that findings will support predicted inferences regarding the relations among general and specific human capital with failures (strike-outs) measured through bankruptcies. Our replication efforts are crucial in examining 1) whether lower technological industries require similar quality human capital, or if high-tech industries demand more; 2) if we can invest in individual level human capital to benefit firm level performance; and 3) if lower technology industries also require other forms of highly specialized human capital. Overall, we anticipate that this replication and extension can facilitate continued, nuanced, research in this area.

This study investigates the differing role of enforcement on the formation of venture capital (VC) syndication networks. We conjecture that public enforcement, with strong investigative powers against any syndicate member, discourages the formation of denser syndication networks due to misconduct risk by a member. By contrast, private enforcement, with strong disclosure and liability standards, enables denser syndication networks, through clear liability rules, standardized securities contracts, and cost sharing amongst syndicate members. Our VC data from 31 countries show a negative impact of public enforcement on VC networks, and partially support the positive impact of private enforcement depending on cultural conditions.

The most important aspect of the transition to the knowledge society is the interaction of science and industry. The article considers the triple helix theory as a basis for managing the innovative economy. The interaction of science and business can provide Russia with larger incomes, especially provided the state participation in the countrys innovative economic development. The authors analyze official documents regulating the cooperation of universities, research institutions and innovative enterprises, and the features of financing this cooperation. The article is based on the databases of the monitoring research of the Institute of Sociology of FCTAS RAS Continuous education and knowledge- intensive industries: Institutions and practices of interaction which was conducted with the financial support of the Russian Science Foundation. On the basis of 100 expert interviews conducted in 2017- 2019 in 12 regions of the Russian federal districts with key figures of innovation processes (chief engineers, leading designers, rectors, ministers, heads of development institutions, venture funds, technoparks and special economic zones), the authors describe the practices of interaction of scienceintensive companies with other participants of the innovative economy. In the framework of the triple helix theory, the authors consider the interaction of knowledge-intensive enterprises with higher educational institutions, the main challenges these enterprises face, investment legislation and risks of investment in scientific research. The authors argue that the state policy in this field needs a network of subjects that would ensure a dialogue between the state, science, business and education at different stages of creating and promoting innovative products. The authors also consider some issues of the development of innovation infrastructure, and possibilities of using the experience of other countries.

This article defines and discusses one particular commercial open source business model, called the (open source) distributor model. It can attract significant venture capital, thereby contributing to the long-term sustainability of open source.

We present the first available - and near-complete - list of large UK manufacturers in 1881, by complementing the employer data from that year’s population census (recovered by the British Business Census of Entrepreneurs project) with employment and capital estimates from other sources. The 438 largest firms with 1,000 or more employees accounted for around one-sixth of manufacturing output. Examples can be found in most industries. Exploiting powered machinery, intangible assets, new technologies and venture capital, and generally operating in competitive markets, their exports about equalled domestic sales. The more capital-intensive accessed stock markets, more - and in larger firms - than in follower economies. Some alleged later causes of UK decline relative to the US or Germany cannot be observed in 1881. Indeed, contemporary overseas observers - capitalist and socialist - correctly recognized the distinctive features of UK manufacturing as its exceptional development of quoted corporations, professional managers and “modern,” scalable, factory production.

Compared to their male peers, female entrepreneurs tend to face greater obstacles in raising venture funding from business angels, venture capitalists, and financial institutions. In this paper, we investigate whether this gender gap also exists in equity crowdfunding. Based on data from the German equity crowdfunding market, we find that ventures with and without female managing directors are equally successful in raising capital when launching their first equity crowdfunding campaign. In contrast, the former are significantly less successful than their peers in seasoned equity crowdfunding campaigns, and this disparity cannot be fully explained by differences in other venture-related or entrepreneur-related characteristics. However, we also find that the gender gap in seasoned offerings narrows if female entrepreneurs set more ambitious funding thresholds. Overall, our results indicate that pitching their equity crowdfunding campaigns in a more promotion-oriented way is a sensible strategy for female entrepreneurs to improve funding success. Equity crowdfunding enables female entrepreneurs to narrow the “gender gap” in venture financing. In this paper, we investigate whether the entrepreneurs’ gender affects how successful they are in attracting capital in the German equity crowdfunding market. Our results indicate that the gender of a firm’s managing director does not affect the funding outcome in initial equity crowdfunding campaigns. In seasoned equity crowdfunding offerings, though, we identify a gender gap in the sense that ventures with female managing directors are significantly less successful in raising capital from crowd investors than ventures solely led by men. However, this gender gap in seasoned offerings narrows for bolder campaign pitches. Hence, setting a higher funding threshold seems to be a simple and straightforward strategy for female entrepreneurs to increase the odds of reaching their funding targets.

Under the designation “platform urbanism,” there is growing scholarly recognition that platform intermediaries are reconfiguring urban industries, processes, and relationships through the collection and manipulation of big data. Central to realizing this economic project is financial speculation on platforms’ ability to coordinate network effects—a phenomenon in which the more users there are in a networked system, the more valuable and useful it becomes. In this paper, I argue that while the existing literature recognizes the importance of network effects, it has also adopted a limited conceptualization that understands platform firms as the primary agents generating and capturing the economic benefits of network effects. Drawing on 12 months of ethnographic fieldwork in Greater Jakarta, Indonesia, I work to expand this understanding through attention to the social lives of network effects—the ways in which platform architectures are always embedded in social relations created and sustained in everyday urban life. I show how ride-hailing drivers have attempted to mitigate the risks of their work through building socio-technical networks of their own, for their own purposes. Doing so reveals that it is not only platform firms and venture capital that speculate on network effects; rather, a range of actors in the city-region seek to tap into driver networks to advance their own social, political, and economic ends. In conclusion, I suggest that attending to these practices opens up space to reframe platform urbanism beyond its current preoccupation with macro political economic analyses, while also establishing new lines of inquiry for “speculative urbanism.”

In the course of over four decades, I have worked with an R&D team on 12 major R&D projects, all with the goal of making hemodialysis simple, safe, effective, and suitable for use in the home. Our team has worked within a University and in private companies and has collaborated with major healthcare drug and device companies. As a practicing nephrologist, my definition of success is when I see the device or drug we helped to develop in widespread clinical use. By this measure, two of the projects were highly successful, but seven failed. Most failures were due to decisions made by various corporations, governmental agencies, and venture capital groups, out of the hands or control of the R&D company. Three projects are still ongoing. There is no shortage of creativity or new ideas in nephrology and in dialysis. The major challenge is in the commercialization of the products.

PurposePrivate equity and venture capital (VC) firms in the capital markets sector invest capital with the primary goal of delivering economic value. However, some firms in the capital markets sector have started to shift this focus to create (i.e. invest in) social value. More specifically, traditional VC firms are starting socially oriented funds, while other firms have emerged to focus solely on investments in social enterprises. These VC firms are contributing to an interesting paradox – performance metrics are not measured by profit alone but also by social innovation. From an architectural perspective, the authors examine the implications of internal design, i.e. how specific strategic and structural factors influence the financial performance of VC firms with a social orientation to determine if these firms really can “do well and do good.”Design/methodology/approachSocial orientation was determined by content analysis of mission statements of the VC firms. Firm strategies, structures and performance were sourced from secondary data. A moderated mediation model was used to test relationships.FindingsResults suggest that (1) socially responsible VC firms adopt distinct foci of social investing that directs their strategic orientation and (2) these various foci have vastly differing effects on the firm's overall performance, strategic decisions made and the architecture of their structural design.Originality/valueThis study is among the first to explore socially responsible VC architectural dimensions, with implications for firm design based on blended measures of success.

The most valuable companies in 2021 are tech firms known as ‘Big Tech’. In recent years these companies were the subject of public and academic scrutiny, especially because they were accused of act...

Over the last three decades, the European Union (EU) has actively created a venture capital market inEurope. A crucial player in that mission is the European Investment Fund (EIF), a unique state agencyspecialized in intermediated financial investments to reach policy goals. The EIF manages mandates forother agencies, such as the European Commission (EC), national ministries and development banks. Inthe case of venture capital (VC) investments, the reasoning behind that strategy of ‘governing throughfinancial markets’ was to spur innovation and job growth by strengthening the digital economy. Bycarrying out that strategy the Commission and the EIF become part of investment chains (Arjaliès et al.2017), including both private and public actors. In this study, I analyze parts of the chain that spans betweenthe EU government bodies, venture capital, the digital economy and its subjects. The scope is confinedto the linkage between European government bodies, one starting point of European VC chains,and the venture capital market over thirty years, beginning with the 1990s. A central node within thatchain, and consequently the focus of the analysis, is the EIF. I trace how the EIF has become a major actorin European VC markets over three decades of crisis-led institutional innovation and the implications ofthis governance strategy., Der Öffentliche Sektor - The Public Sector 48(2): 9-11

Young and dynamic entrepreneurs are very much interested in starting up new ventures with new innovative ideas. These new ideas require funding. Every entrepreneur, be it a venture capitalist or a financier, is interested in knowing when a startup will start generating the profits or when there will be a break-even for assessing the viability of the project. Being dynamic in nature, they are interested in knowing when they will get back the funds (fixed cost) invested in the project as soon as possible, so that funds can be spared for another new innovative ideas. It is here the role of break-even analysis comes into existence. Break-even analysis is a management tool to study cost-volume-profit relationship. It is concerned with determining that level of activity where total revenue/sales is equal to total cost in narrower sense. However, its wider interpretation may refer to techniques which determines profit at any level of activity. BEP generates the information that is useful in decision making and profit planning. If sales are not equal to total cost, it cautions management to find cause and take appropriate actions to reduce fixed cost or variable cost. The objective of writing this paper is to develop the understanding how to calculate the different types of Break-even points in different business models and how they are useful in decision making, planning and control. Cases-based on real life situation have been used to explain different types of BEP. The paper will be useful to start-up business and their management in decision making.

We review the growing literature on the relationship between venture capital (VC) booms and start-up financing, focusing on three broad areas. First, we discuss the drivers of large inflows into the VC asset class, particularly in recent years, which are related to but also distinct from macroeconomic business cycles and stock market fluctuations. Second, we review the emerging literature on the real effects of VC financing booms. A particular focus of this work is to highlight the potential impact that booms (and busts) can have on the types of firms that VC investors choose to fund and the terms at which they are funded, independent of investment opportunities—thereby shaping the trajectory of innovation being conducted by start-ups. Third, an important insight from recent research is that booms in VC financing are not just a temporal phenomenon but can also be seen in terms of the concentration of VC investment in certain industries and geographies. We also review the role of government policy, exploring the degree to which it can explain the concentration of VC funding in the United States over the past 40 years in just two broad areas—information and communication technologies and biotechnology. We conclude by highlighting promising areas of further research.

Electric vertical takeoff and landing (eVTOL) aircraft for urban commuting are currently under development by more than a dozen different companies. These concepts and prototypes, representing well over a billion dollars of venture capital investment in 2020 alone, promise that sometime in the near future, point-to-point travel between suburbs and urban centers will happen by air using innovative new flying vehicles that are fast, quiet, clean, and far more affordable than a helicopter. United Airlines has ordered 200 eVTOLs. American Airlines has ordered 250, with an option for 100 more. But none of these eVTOL platforms are yet certified to carry passengers, and as a fundamentally different approach to flight, there are still open questions about safety.

The subject of the research is the financial mechanism of the modern venture investment market under conditions of uncertainty and the requirements of accelerated innovative development. The study aims to analyze the impact of the pandemic on the sustainability of the institutional behavior of venture capital investment in the global and Russian markets. The authors apply such scientific methods as sampling, grouping, comparison, analogy, analysis, generalization, systemic-structural approach to assessing the development of the subject of research. The paper analyses the role of venture investment in the successful promotion of innovations using the example of the world’s leading companies in 2016–2021. Successful examples of venture investment are presented. The study investigates the impact of the pandemic and lockdown on the level of volatility, composition and dynamics of venture capital investments in 2020– 2021. The authors conclude that the pandemic has an impact on the sectoral redistribution of investments in favor of venture investments in medicine, biotechnology, the sector of information and communication technologies and solutions for business, education, healthcare, on market polarization (covid-negative, covid-positive, covid-neutral), on reducing the role of state funds and Russian accelerators, while increasing the interest and scale of participation of private institutions (foreign investors, business angels, syndicated angel investment), to increase of the volume of the Russian venture capital market by increasing the average ticket size despite the reduction in their number, to strengthen the practice reproduction of their own ecosystems by corporate institutions, to popularize venture capital investment deals in terms of mergers and acquisitions. Prospects for researching the venture capital market are associated with the constant attention to high-tech covid-positive projects, with the growth of transactions in the early stages, due to the increase in the number of professional communities, with the pinpoint development of specific tasks of an investor or corporation by accelerators, with venture investment of companies with the subsequent entry of the project into their own ecosystem, with the improvement of the state’s restrictive measures aimed at a clear institutionalization of professional activities and increasing the financial stability of participants in the investment and innovation markets, with the stimulation of mechanisms for regional innovative development to attract capital to high-risk projects in the regions.

There are many influencing factors in the entrepreneurial process, which lead to a variety of unknown situations in the entrepreneurial process and affect the entrepreneurial process. In order to improve the effect of entrepreneurial analysis, this paper improves the traditional machine learning algorithm and proposes an entrepreneurial dynamic model based on improved machine learning. Aimed at the opportunistic behavior of the following venture capital institution under joint investment, this paper constructs an evolutionary game model between the leading venture capital institution and the following venture capital institution under joint investment and constructs an industrial cluster knowledge fusion and entrepreneurial innovation model. Moreover, this paper confirms through the structural equation model that the use of information fusion technology can improve the effectiveness and comprehensiveness of internal and external knowledge of industrial clusters. In addition, this paper uses experimental analysis methods to evaluate the performance of the entrepreneurial dynamic model constructed in this paper. From the research results, it can be seen that the system constructed in this paper has a certain effect.

PurposeThis paper aims to analyse the effect of the investment duration, the overall market condition and the industry to which the investee firm belongs on exit returns realised by venture capital (VC) firms invested in Indian market, using hierarchical regression models.Design/methodology/approachThe study examines the relationship that exist among the variables of interest by analysing all the 210 exits that happened in the Indian VC market over the period 2004–2017 by using analytical tools such as moving averages, hierarchical regressions and pooled ordinary least squares regression.FindingsExit return has an approximate U-shaped relationship with investment duration, and the turning point in the convex relationship happens around seven to eight years after investment. Returns are weakly related to the market condition, discarding the market timing hypothesis. Relationship patterns are found to be generally unvarying during the time period under study.Research limitations/implicationsThe results indicate VC funds in the Indian market tend to exit in a brief time span and gain substantial returns from the immediate exits beyond, which returns start dipping. This points to the illiquidity of the Indian VC market wherein the exits from “lemons” are quite tricky, which make them remain invested for longer durations and eroding the value substantially in the process. VC funds may make rational investment/exit decisions in the Indian market capitalising this knowledge.Originality/valueThis study empirically connects the value creating factors in a VC process to the established theories about the early stage investments and analyse the applicability and relevance of those theories in a market with high growth potential like India.