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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.

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.

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.

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.

Given overall lack of gender diversity in the venture capital and entrepreneurship industry shown in Calder-Wang and Gompers (2017) we ask: What promotes greater gender diversity in hiring? Does diversity lead to better firm performance and higher investment returns? In this paper, using a unique dataset of the gender of venture capital partners’ children, we find strong evidence that when partners have more daughters, the propensity to hire female partners increases. Moreover, our instrumental variable results suggest that increased gender diversity improves deal and fund performance. Lastly, the effects are primarily driven by the gender of senior partners’ children.

The post-coronavirus era will open myriad opportunities for the biopharma industry. However, the extent to which each country will take advantage of this promising new scenario will largely depend on its position in a few key areas. Here, we offer an overview of the European countries that are winning and those that are lagging behind in the race to attract the greatest investment in this industry and to attain the highest rate of successful new ventures. Our results highlight the vital importance of a sound, active funding base, especially in terms of venture capital. Our findings also suggests that general scientific foundations are not enough to secure an advantage in new venture formation.

Using hand-collected governance data and a two-stage least squares approach to control for the endogeneity of firm governance structure, this paper shows that private investments in public equity (PIPE) issuers with higher board independence grant investors lower price discounts and experience improved announcement effects, improved long-run operating and stock performance, and increased investment. Board independence also encourages issuers to place more shares with venture capital investors, and fewer shares with managerial investors. These findings suggest that strong independent governance can mitigate the agency costs inherent in PIPEs.

This paper provides causal evidence of local innovation spillovers, i.e. innovation by one firm fostering innovation by neighboring firms. First, I document that exogenous shocks to innovation by listed firms affect innovation by private firms in the same geographical area. I also find that such local innovation spillovers decline rapidly with distance. Second, I find that local innovation spillovers stem at least in part from knowledge diffusing locally through two channels: learning across local firms and inventors moving from their employer to both existing firms and newly started spin-outs. Finally, I study the two-way relationship between innovation spillovers and the availability of capital. I find that local innovation spillovers lead venture capital funds from outside the area to invest more in the local area, and that conversely capital availability amplifies local innovation spillovers.

We analyze the funding of start-up companies across financing rounds, focusing on the dynamic interactions between angel investors and venture capitalists. Using unique data from British Columbia, Canada, we show that angels and venture capitalists are dynamic substitutes. This substitutes pattern applies across the performance range of companies. It is less pronounced for serial angels. An instrumental variable analysis, based on available investor tax credits, suggests that the substitutes pattern is driven by company characteristics. Overall, the evidence points to the existence of parallel streams of angel and venture capital funding, with fewer transitions between streams than is traditionally assumed.

This paper proposes a consensus model for multi-experts multi-criteria decision making (MEMCDM) problems with probabilistic linguistic term sets (PLTSs), which also considers the regret-rejoice emotions of decision makers (DMs) in their decision-making processes. Additionally, the Dempster-Shafer theory is applied to estimate the probability of the market status which is related to the perceived values of the alternatives. Moreover, an algorithm is given to determine the weight of each DM. Then, a detailed consensus procedure is proposed and an illustrative example is used to show the feasibility of the proposed model. Finally, some comparative analyses are carried out to demonstrate the advantages of the proposed consensus process.

We investigate the effects of venture capital ownership on the demand for auditor reputation, the supply of assurance services, and the quality of financial reporting in the market for new issues. Extensive research exists on the relation between auditing and ownership, however, limited research exists on the relation between auditing and venture capital ownership, a form of ownership characterized as activist and that goes beyond the simple provision of capital. We find that venture capital ownership increases the demand for auditor reputation and that auditors provide a higher level of assurance service to a venture-capital-backed IPO. We also find that the presence of a venture capitalist is associated with lower financial reporting quality, however, this effect is largely offset when a high reputation auditor is also on the IPO. Our evidence is consistent with the argument that venture capitalists on the IPO influence the choice and the extent of auditing to communicate information to investors in a manner that maximizes venture capitalists’ returns for their portfolio fund.

This paper studies how the crowdfunding price, funding goal, and mechanism selection are influenced by the participation of altruistic donors who contribute money to help a crowdfunding campaign reach its goal instead of being motivated by rewards. A creator can choose either the All-or-Nothing (AON) mechanism, where the creator keeps the pledges only if the total amount pledged exceeds the funding goal, or the Keep-it-All (KIA) mechanism, where the creator keeps the pledges regardless of the outcome of the campaign. We show that when the creator raises funds only through crowdfunding, the contributions from donors encourage the creator to choose AON, while when the creator will approach a venture capitalist (VC) for further investment after crowdfunding, donor contributions encourage the creator to choose KIA. Our analysis also shows that the creator is more likely to exploit the contributions from donors by setting a high target number of backers under KIA than under AON. Furthermore, we explore two extensions, scenarios in which consumers arrive at the crowdfunding campaign sequentially or the creator can choose a mixed mechanism.

In Internet venture capital (VC), it is very important to fully analyze and evaluate the influential factors. Because this activity usually involves amounts of experts, it makes sense to incorporate it into large-scale group decision-making (LSGDM). In this process, how to deal with the noncooperative behaviors and express the preference information are two important issues that need to be addressed. Given this, this paper is committed to evaluating the influential factors of Internet VC by managing noncooperative behaviors in LSGDM. Firstly, the preference information can be expressed by linguistic preference orderings (LPOs) which can be used to express unbalanced relationship between any two adjacent alternatives. Then, three kinds of noncooperative behaviors are taken into consideration, and we can identify the group who belongs to one of the three noncooperative behaviors, and then develop methods to manage them respectively. Furthermore, a consensus reaching model is established to manage these noncooperative behaviors. Moreover, we apply the proposed model to solve a practical LSGDM problem involving the evaluations of the influential factors in Internet VC. Finally, comparative analyses between the proposed model and some existing methods are made to show the validity and applicability of the proposed consensus reaching model.

Numerous theoretical and empirical studies have investigated the phenomenon of venture capitalists’ involvement in new ventures. However, there has been a lack of attention to the VCs’ involvement ...

In this paper, we develop a dynamic model to study the entry and the exit decision for a VC facing the opportunity to invest and expand a start-up firm. Two settings are considered. A benchmark-setting, where no time constraints for exiting are in place, is compared with the one where, realistically, the VC has a finite time-window to disinvest. In both cases, we consider the trade sale (M&A) as the exit route. The model returns the entry and the exit triggers, the optimal post-money ownerships, the expected cash multiple for the VC, and also proposes a new time-adjusted version of the cash multiple, useful for measuring, ex-ante, the expected performance of the investment. The model aims to guide the VCs when analyzing their investment opportunities, considering the entire VC’s business-cycle (entry–expand–exit). Finally, the model is applied to a hypothetical, but realistic, situation in order to discuss the main outcomes. A comparative statics analysis is also performed.

Venture capital (VC) markets are essential for the development of high-growth entrepreneurship. Previous studies have discussed the importance of formal institutions and regulations in the creation of VC markets. However, the role played by informal institutions—and how they interact with formal institutions—is still puzzling. To disentangle this issue, we performed a 26-year analysis of the case of Chile, an emerging market where formal institutions and regulations had long been in place but a VC market failed to emerge. Based on our findings, we develop a theoretical framework where we propose that (1) the presence of strong formal regulatory institutions that support VC markets is a necessary but not sufficient condition for the emergence of a robust level of VC activity, and (2) informal institutions that legitimate high-growth entrepreneurship are a necessary antecedent to the availability of high-growth entrepreneurs and, therefore, to the emergence of a robust level of VC activity.

While corporate venture capital funds (CVCs) are commonly analyzed as homogenous units, they display significant heterogeneity across various organizational aspects, which affect them and subsequently their portfolio firms. Using a sample of 383 European portfolio firms from the longitudinal VICO dataset, we first investigate the impact of investor type (independent vs corporate) on firm operating efficiency. We show that firms backed by CVCs suffer reductions in productivity. We then account for CVC heterogeneity and find that these significant reductions in operating efficiency only occur for ventures backed by endoisomorphistic CVCs, which resemble more corporate structures. By contrast, firms backed by exoisomorphistic CVCs, which resemble more independent venture capital structures, do not show significant differences in productivity compared to ventures that receive independent venture capital backing.

Private equity performance, both for buyouts and venture capital, has been highly cyclical: periods of high fundraising have been followed by periods of low performance. Despite this seemingly predictable variation, we find modest gains, at best, to pursuing realistic, investable strategies that time capital commitments to private equity. This occurs, in part, because investors can only time their commitments to funds; they cannot time when commitments are called or when investments are exited. There is a high degree of time-series correlation in net cash flows even across commitment strategies that allocate capital in a very different manner over time.

We use venture capital firms, or VCs, in China from 2011 to 2017 to examine the treatment effect of their investments on corporate social responsibility (CSR) activities at the firms in which they invest (invested firms). Several results are noted. First, VCs, which are primarily profit making, promote research and development investments and firm value at the invested firm. Second, VCs provide advisory services to promote CSR activities at the invested firms, indicating significant VC treatment effect. Third, the impact of VCs on CSR activities at the invested firms is magnified when the VCs are reputatable or with foreign background. Finally, we also show that VCs improve the financial condition of the invested firms by reducing their financial constraints and facilitating greater access to bank loans, while CSR amplifies the VC’s effect on the firm’s financial condition.

This paper adds a government subsidy variable to expand the WWY (Wang, C., Wang, N., Yang, J., 2012) model, which is a three-stage entrepreneurial dynamic partial equilibrium model and a useful theoretical tool to analyze entrepreneurial realities after government intervention factors are considered. We analyze the productivity shock and market portfolio risk, endogenous entry and exit, investment, consumption, enterprise value and so on, using 15 parameters and 21 variables. The paper explains the present hi-tech entrepreneurial competitive advantage of US, even Chinese government provides lump sum financial subsidy. Although subsidies lower the initial entrepreneurial condition, significantly increase the number of startups, but would not improve entrepreneurial quality such as the investment and the growth of the hi-tech entrepreneurial wealth. The ongoing market deepening reforms such as IPO reform and venture capital cooperation will finally improve model parameters of China and weaken US’s advantage. Another conclusion is that debt-based entrepreneurship should not be encouraged. The conclusions will have some important policy significance.

In 2008, the financial crisis caused by the SUBPRIME mortgage crisis and the development of information technology showed that people’s life was gradually networked and digitized, and the digital currency represented by Bitcoin was generated. This paper discusses the investment opportunities and risks brought by the rise of digital currency and its importance to the development of "One Belt And One Road". We propose a currency digital venture capital model based on information entropy, BP neural network and CVaR model. The model is divided into two parts. Part A is the research on the risk index model of digital currency based on the information entropy change of CVaR model. Part B is by BP neural network toolbox and CVaR model changing weights of digital currency risk index model, and analyse the development of digital currency weighted score to get the advantage of the Yangtze river delta region. It is of practical significance to build a venture capital model to predict the future development prospect of digital currency and get an investment model with more beneficial returns for investors to avoid risks.

After initial investments, relationship financiers routinely observe interim information about projects before continuing financing them. Meanwhile, entrepreneurs produce information endogenously and issue securities to incumbent insider and competitive outsider investors. In such persuasion games with differentially informed receivers and contingent transfers, entrepreneurs’ endogenous experimentation reduces insiders’ information monopoly but impedes relationship formation through an “information production hold-up.” Insiders’ information production and interim competition mitigate this hold-up and jointly explain empirical links between competition and relationship lending. Optimal contracts restore first-best outcomes using convertible securities for insiders and residuals for outsiders. Our findings are robust under various extensions and alternative specifications.

While the importance of trust in B2B relationships has been well established, research is yet to investigate its processual nature. This study investigates the VC-Entrepreneur relationship – a special B2B relationship to outline the nature and evolution of trust across a venture's life cycle. Results suggest that early-stage relationships are characterized by asymmetric trust, which declines with time and impacts cooperation between both sides, access to funding and business networks, contract enforcement, feedback, mentorship, and knowledge sharing. Late-stage VC- Entrepreneur relationships suffer from symmetric distrust, which increases with time, resulting in an overt emphasis on contracts, syndicated investments, disagreements during decision making, and pressure to exit. This study extends B2B trust literature by offering a relationship-phase-contingent view of trust across a venture's life cycle, outlining specific contexts that question the reciprocal and symmetric assumption of trust in dyadic relationships. It highlights how the interplay among power, opportunism, and weak institutional environment dictate dyadic trust. And finally, the paper outlines three testable propositions on trust in VC- Entrepreneur relationships that can be extended to other emerging economies.

This paper sheds light on the effects of two different types of R&D financing sources respectively from a supply-demand combined perspective, namely subsidy from government and venture capital in market, on the innovation process. Our empirical analysis is based on a unique data set of industrial enterprises located in Beijing ZhongGuanCun Science Park during the period 2008–2015. In terms of the two stages of the innovation process, this paper untangles and compares the effects of the two financing sources on R&D input, patent output as well as profit outcome. We find that both supply- and demand-side external R&D financing channels have differential effects on the innovation process in terms of input, output or outcome as well as the different-sized enterprises. Supply-side subsidy tends to be more effective at the front end of the innovation process, while venture capital shows a demand-side consideration on technology evolution by focusing more on the back end of the innovation process. Both government subsidy and venture capital can have a significantly positive impact on the entire innovation process of small and micro enterprises, whereas for large and medium-sized enterprises, subsidy has no significant impact on profit outcome and venture capital can only affect patents positively. These findings suggest that the Chinese government should focus more on small and micro firms and increase such firms’ access to venture capital through a process of certification, so as to achieve an effective combination of government functions and market functions.

This paper seeks to contribute to a critical dialogue on disruption and the sharing economy by reflecting critically on O Bike’s appearance and disappearance in Melbourne, Australia. Recalling the credulousness that attended the arrival of O Bike’s fleet between June 2017 and 2018, this paper gives primacy to considering whether O Bike was ever about bicycles and transport, showing how the scheme aligned itself with hyped discourses of disruption and the sharing economy, whose true beneficiaries were startup entrepreneurs developing platform-based schemes seeking venture capital and unicorn status. In Melbourne, this ‘success’ left the city with hundreds of bicycles in its waterways, and little insight or curiosity about how this was generated by a group of individuals carrying out their professed modus operandi of 2010s tech startup culture, which has no meaningful, enduring relationship with public transport or urban cycling. This re-telling of O Bike’s dispersal and fall in Melbourne seeks to focus attention within transport studies and political geography on docked and dockless public bike schemes to the occluded centrality of venture capital as a key agentic force at work in global cities in the decade just passed. The limit of this re-telling is the utopia of 2010s capitalism: unlimited profit and success without regulation or responsibility. By offering critical counterfactuals from this instantiation of dockless, it encourages policy makers to think more carefully about the value and meaning of ‘sharing’ platforms.

This study analyzes the impact of venture capital (VC)-backed IPO firms’ patent growth during the period of VC investment on the long-run performance of stock returns, using data on the China A-share market between 2003 and 2013. The baseline results indicate that VC-backed firms that have generated successful patent filings during the investment period of VCs exhibit superior post-IPO performance compared to other VC-backed firms and non-VC-backed firms in the long run. These results continue to hold under several robustness checks. Overall, we provide a clear, crucial mechanism showing that venture capital improves the long-run performance of IPOs by increasing the number of granted patents of portfolio firms; that is, technological innovation is the major contributing factor to the long-run performance of VC-backed IPOs.

This study analyses small knowledge-intensive service (SKIS) firms’ capital structure rebalancing, before and after Venture Capital (VC) entry. We use data for a sample of 1161 Western European SKIS firms, for the period 2006–2015. Two sub-samples were created: one composed of firms before VC entry; the other composed of SKIS firms after VC treatment. We use panel data models and the system GMM (1998) dynamic estimator. The results obtained suggest that after VC entry, SKIS firms are close to the predictions of the pecking order theory. Therefore, SKIS firms after VC participation on firm equity, probably become less dependent on debt, choosing internal finance to fund assets that are firm-specific or have an intangible nature, and, hence cannot be pledged as collaterals.

Venture capital, an important source of financing for potentially high-growth new businesses, is believed to suffer from information frictions. This paper quantifies the magnitude of these frictions among participants in new venture competitions. In a regression discontinuity design with data from 87 competitions, winning a round increases the chances of external financing by about 35%. Winning is most impactful for ventures that are ranked just above the cutoff but receive no cash prize, and judge ranks strongly predict venture success. The results indicate that these information problems in new venture finance are large, and competitions can help resolve them through certification.

This paper explores the creation and evolution of new stock exchanges around the world geared toward entrepreneurial companies, known as second-tier exchanges. Using hand-collected novel data, we show the proliferation of these exchanges in many countries, their significant volume of Initial Public Offerings (IPOs), and lower listing requirements. Shareholder protection strongly predicted exchange success, even in countries with high levels of venture capital activity, patenting, and financial market development. Better shareholder protection allowed younger, less-profitable, but faster-growing, companies to raise more capital. These results highlight the importance of institutions in enabling the provision of entrepreneurial capital to young companies.

Conflict analysis, which plays an important role in our society, has attracted more and more attentions. However, the existing conflict analysis models are not effective enough to evaluate the inconsistency degree of cliques that have more than two individuals. Besides, for each clique, its allied, conflict and neutral attributes have not been explicitly defined and thoroughly explored. Therefore, due to the lack of enough explicit clues, we cannot further formulate some strategies manipulating the conflict degrees of related cliques to realize the specific objectives. Last but not least, one-vote veto is seldom considered, although it plays a vital role in many fields, such as venture capital and United Nations Security Council resolutions. In order to solve these problems, we resort to three-way concept analysis and describe a clique by using the intent of a specific concept. On the basis of the obtained specific concepts, we derive the allied, conflict and neutral attributes of cliques, and further make decisions and explore the maximal coalitions and minimum conflict sets. Finally, in order to cater dynamic environment, we also describe an incremental algorithm for conflict analysis.

In this paper, we explore whether factors such as financial markets and accounting qualities contribute to foreign direct investment (FDI). We use a unique data source: the survey data from World Economic Forum, to measure the efficiency of the financial markets and the quality of accounting standards. With this unique data, we demonstrate that financial markets and accounting quality are important factors of FDI inflow into a country. In particular, FDI is positively correlated with the strength of financial audits and reporting standards and venture capital availability for all countries. We also show that accounting quality measures are more important for developing and emerging countries than for developed countries. On the other hand, financial market measures, especially the access to venture capital, have a bigger impact in attracting FDI flow into developed countries. These results support the hypothesis that local financial markets and accounting quality affect FDI. The results have strong policy implications for governmental regulatory agencies.

This study investigates whether early mover (dis)advantages are valid in the blockchain industry. Specifically, it examines how the entry timing of a startup in the blockchain industry affects its funding attraction from venture capitals and innovation performance. Moreover, this study examines whether the startup’s knowledge spillover activities moderate the relationship between its entry timing and subsequent performance. An empirical analysis is conducted on 255 startups in the blockchain industry founded between 2007 and 2016. The results show that while early mover advantages exist in terms of funding attraction from venture capitals, the entry timing and innovation performance have an inverted U-shaped relationship, as expected. Knowledge spillover activities of blockchain startups positively moderate the relationship between the entry timing and the venture capital attraction. Managerial and theoretical implications for the blockchain industry are discussed.

By using the panel date of Chinese enterprises, this paper analyzes the influence of venture capital on innovation performance. In this paper, the number of patent application and the patent quality(invention patent applications, number of effective patents, IPC number of international patent classification, and patent claims) are used to measure the innovation performance of enterprises, and the regression results show that the innovation performance is significantly promoted by the venture capital; for industries with higher dependence on external financing and high technology intensity and areas with better protection of property rights, venture capital promotes innovation performance more significantly. In this paper, it further distinguishes the characteristics of venture capital institutions, and finds that the promotion effect of non-state-owned venture capital on innovation performance is significantly greater than that of state-owned venture capital; the venture capital institutions with high reputation and high network capital play a more significant role in promoting innovation performance.

New space is a misleading expression. Many new trends steer the evolution of space activities. Development of commercial space, with start-ups and space ventures, is one of the most visible trends in space. Stimulated by the first initiatives related to space tourism, access to space and the growing use of small satellites, space activities have attracted new entrepreneurs, both start-ups and big web actors with substantial investment capacity. This revolution started in the Silicon Valley and spread worldwide. Start-ups have attracted around $21.8 billion of investment from 2000 to 2018. It is far below the annual institutional budgets but the pace gained momentum since 2006 and specially 2012. Between teenage crisis and age of reason, New space is now old: the first start-ups shall confirm their promises, while new players pop up and try to find their way. It shakes the legacy players but they demonstrate resilience and adaptation capacity. It is now the right time to take stock of the first lessons learnt. Start-ups disrupt the established industry? Instead of a simplistic shortcut, this paper reports an “organizational ecology” study. With a deliberate industrial viewpoint, its ambition is to help understanding complex evolutions in the space ecosystem. The first part of the paper introduces the current ecosystem, its actors, the key trends and the main types of activities. Through facts and figures on technology, investments and markets, the second part reviews how “new space” trends are preparing the advent of big space. The third part summarises lessons from other industries and typical disruption scenarios that could affect space activities. The drivers of New space are discussed in section four. The last part is a foresight exercise, discussing possible evolutions and impacts, threats and opportunities. The decisive role of institutional actors and the « new space » with more and more space-faring nations is also highlighted. Something big is happening in space. While it is too early to depict the new landscape, this study shows that the future picture will not be black and white but more colourful. The size and the age of the company are less important than agility, mindset, ability to manage risks and to cooperate. A big vision for the future, from entrepreneurs or from nations, is also needed.

Today’s disruptive innovations are driving the creation of numerous billion-dollar startups. Venture capitalists focus on these potentially disruptive technology startups and fund them furiously, advancing their speed of growth. The idea is to scale fast and seek huge returns for investors. Terms that define this type of aggressive scaling have recently developed in Silicon Valley. Unicorn is defined as a venture with a value of $1 billion, while a decacorn describes startups with a value of $10 billion. Another recent term is blitzscaling: funding a venture for extremely fast growth and prioritizing speed over efficiency in an environment of uncertainty. While blitzscaling is being used heavily by investors in Silicon Valley, we look at exactly what comprises this new phenomenon and how it is used in practice. We examine the concept, its stages, and its prevalence before reviewing the different examples of how the strategy has been implemented for success (the good), cases of its failure in practice (the bad), and the extreme cases of ethical compromise by ventures (the ugly). From these cases, we draw specific lessons that, if understood and appropriately addressed, would help new ventures effectively implement the strategy.

I explore the prevalence of exchanges of innovation resources inside venture capital portfolios. I show that after companies join investors’ portfolios, several proxies of exchanges between them and portfolio companies (relative to matched nonportfolio companies) increase by an average of 60%. The increase holds when joining events are plausibly exogenous and when VCs’ bargaining power and potential conflicts of interest are low. Three novel mechanisms are supported: carve-outs, spawning, and recycling, whereby entrepreneurs divest innovation units, start new ventures, and reuse assets in other portfolio companies, respectively. Results suggest that returns to innovation are higher in venture capital portfolios.

This paper presents a new explanation for the prevalence of convertible bond in venture capital finance. By modeling two-sided asymmetric information between entrepreneurs and venture capitalists, we prove that convertible bond can implement the optimal contract. The optimal conversion ratio increases when it's more difficult to attract a venture capitalist, and it also increases with the extent of adverse selection in the venture capitalist market. Our model also predicts that the optimal conversion ratio is negatively correlated with the competition in VC market and the level of VC's human capital.

The prior Venture Capital research (VC) has examined the micro processes of syndication and alliance formation. However, a macro and more systemic view is lacking, where past research has neglected the global VC-ecosystem. Using a qualitative method and an abductive approach, we combine and integrate two strands of research, on VC and ecosystems, to shed light on the crucial dynamics in the VC industry. We provide a VC-ecosystem definition and portray the ecosystem architecture in a segmentation matrix of investor types and roles, including Active Hubs and Complementors. Moreover, our findings identify and explain central Hub orchestration mechanisms: enablers, governance, partner management, co-specialization, and nurturing. The study concludes with a discussion on the theoretical and managerial implications, and suggestions for future research on a global ecosystem, which operates at a higher level than the traditional firm-level ecosystems on which the previous research generally focuses. Validerad;2023;Nivå 2;2023-02-03 (sofila)

Venture capitals (VCs) often do not withdraw upon initial public offerings (IPOs) but continue to have impacts on firm financing behaviour. Through a proprietary dataset of 21,811 firm-year observations on the Shanghai and Shenzhen Stock Exchanges between 2009 and 2018, we examine the impact of VC backup on firm access to bank loans and the underlying mechanism. We confirm that VC backup has significant and positive impact on firm access to bank loans, both short-term and long-term. However, our mechanism tests suggest that the impact, different from current literature, is from VC's state ownership but not from governance or certification effect. Furthermore, rather than state-owned enterprises (SOEs), VC's impact only exists among private firms. VC's state ownership may significantly contribute to firm's better access to bank loans. Our findings are robust after controlling fixed effects, missing variables, sample selection bias, reverse casualties, or other endogeneity issues. Refereed/Peer-reviewed

During the last years, the number of digital platforms offering allegedly environmental sustainable last-mile logistics services has been increasing fast all over the world. Their size and geographical spread are growing leaps and bounds. Some studies suggest that they are still operating at losses and relying on venture capital to carry on growing. In this paper we employ real-life data gathered from the largest food delivery platforms (Just Eat, Glovo, and Deliveroo) operating in the city of Barcelona (Spain) to analyse the profitability of these business models. We develop a Monte Carlo simulation model with several scenarios to estimate how many orders are needed to reach economic profitability. Using this simulation model, a second model based on multiple linear regression is built to investigate the relationship between ‘the minimum number of orders required to reach profitability’ and several independent variables, such as the share of the total purchase order or the delivery time-distance. The potential use of this tool for managers is discussed, and several lines of future research on the economical profitability of food delivery operations are highlighted.

We summarize venture capital investment into ophthalmology companies from 2011 to 2021 and quantify early-stage investments in biotechnology, pharmaceuticals, surgical devices, and diagnostic equipment. We describe the companies and investors most active in ophthalmologic innovation.

I analyze prior entrepreneurship as a determinant of financial contracting with venture capitalists and find more company-favorable contracts in startups founded by serial entrepreneurs. Repeat founders and other insiders retain greater board control and also suffer less equity dilution in their dealings with VCs. Second, serial founders retain their CEO positions more often. Third, startups founded by serial entrepreneurs obtain higher valuations at VC funding although this finding is confined to previously successful founders who also obtain the best contracts. Interestingly these results obtain despite poorer performance of such startups and VCs funding them sooner. Overall, even previously unsuccessful serial entrepreneurs receive better deal terms than novice founders, consistent with entrepreneurial learning being an important factor in fostering future entrepreneurship.

We analyze how frivolous patent infringement claims made by nonpracticing entities (NPEs, or “patent trolls”) affect startups’ ability to grow and create jobs, innovate, and raise capital. Our identification strategy exploits the staggered adoption of anti-troll laws in 32 US states. The laws lead to a 4.4% increase in employment at high-tech startups—an increase driven by IT firms, a frequent target of NPEs. Increased access to financing, both venture capital and patent-backed lending, is a key channel driving our findings. Measures aimed at curbing the threat posed by NPEs can thus help reduce the real and financing frictions faced by startups.

Widely regarded as an efficient source to finance innovative activities and sustainable growth, venture capital has achieved a remarkable development since the 1980s. By employing a unique city-level panel dataset, this study first illustrates the locational dynamics of venture capital investment in China, while empirically investigating major socio-economic drivers of China's venture capital activities. We find non-trivial spatial spillovers of venture capital activities featured by regional imbalance, and identify government intervention, exit opportunity, human capital accumulation, new invention and transport infrastructure as five major influential factors for the formation and evolvement of local venture capital activities. Finally, we show the critical role of international venture capital and domestic institutional factors in shaping the venture capital industry in China. The study deepens the understanding of distributional and operational patterns on China's venture capital market, and raises multiple implications for entrepreneurs and policy makers on the efficient planning of venture capital activities in large developing economies.

Using data on the entire population of businesses registered in the states of California and Massachusetts between 1995 and 2011, we decompose the well-established gender gap in entrepreneurship. We show that female-led ventures are 63 percentage points less likely than male-led ventures to obtain external funding (i.e., venture capital). The most significant portion of the gap (65 percent) stems from gender differences in initial startup orientation, with women being less likely to found ventures that signal growth potential to external investors. However, the residual gap is as much as 35 percent and much of this disparity likely reflects investors’ gendered preferences. Consistent with theories of statistical discrimination, the residual gap diminishes significantly when stronger signals of growth are available to investors for comparable female- and male-led ventures or when focal investors appear to be more sophisticated. Finally, conditional on the reception of external funds (i.e., venture capital), women and men are equally likely to achieve exit outcomes, through IPOs or acquisitions.

This paper analyzes the relationship between pre-IPO growth and the post-IPO long-run performance for venture capital (VC)-backed firms. Our results show that the effect of pre-IPO growth on post-IPO long-run performance is positive, but is attenuated by venture capital in a matched sample. Focusing on VC-backed IPO firms, we find an inverted-U relationship between pre-IPO growth and post-IPO long-run performance. In addition, our baseline results continue to hold in a variety of settings, including post-IPO profitability performance and ownership divisions of venture capital. We explore one underlying interpretation through which post-IPO long-run performance exhibits a reversal when pre-IPO growth increases to a saturation point: VC-backed firms tend to engage in accounting fraud due to the incentives from some opportunistic VCs to take firms public earlier.

This paper models investment duration in the Indian venture capital (VC) market, by industry and exit route. We examined 3416 investment and exit transactions in India during the period 2000–2017 and found that the probability of staying invested for more than ten years was 70%. Exit probabilities were low in most sectors. Investment duration was not positively associated with the investment valuation; rather, it was impossible to exit from the majority of investments because of the illiquidity of the VC market.

Innovation is the key to the economic development, and enterprises are the foundation of innovation. Bridging both these elements is the venture capital, who often rely on patents as one way to assess the potential of a start-up. Patents have the power to send signals about a start-up's capabilities, future prospects, and their right to produce and profit from specific innovations. To understand the influence these signals have on the amount of venture capital funding a start-up receives, we analyzed the three main types of signals a patent can send – technological, commercial, and legal – along with other “noise” factors that may affect a signal's transmission. Each of the hypotheses put forward examine how the various attributes of a patent or a start-up act as signals to venture capitalists, and one regression model were constructed as tests. Using the bio-pharmaceutical industry in China as a subject, the results of this empirical research show that legal signals have the greatest influence over venture capital funding levels, closely followed by technological signals. Commercial signals have less impact. Further, invention patents, particularly public invention patents, have a significant impact on venture capital decisions. This research has a significant meaning to start-up as venture capitalist, who can choose a right way to transmit or decode the patent signal in venture capital.