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The interview with Silicon Valley venture capitalist Mark Coopersmith explores the current landscape of privately funded fusion energy efforts. Coopersmith discusses the challenges and optimism surrounding the commercialization of fusion energy, highlighting the different perspectives of physicists, engineers, entrepreneurs, and investors. The interview delves into the role of venture capital in funding fusion startups, the need for government support in basic research, and the potential spin-off technologies that could emerge from advancements in fusion science. The discussion also touches on the intersection of Silicon Valley culture and the portrayal of tech startups in popular media. [Extracted from the article]

Screening theory explains how decision-makers search for and use external cues to overcome information asymmetry problems under conditions of uncertainty. We introduce screen credibility, screen necessity, and screen salience to the screener as boundary conditions that determine screen efficacy. We test our ideas in the context of corporate venture capital (CVC) funding aimed at industries where firms do not yet compete. These decisions are fraught with uncertainty, so we suggest that CVC decision-makers use the industry shareholdings of a firm's quality shareholders, who are knowledgeable about many industries, as a screen to help them decide whether to continue or terminate CVC funding in that industry. We also hypothesize that screen credibility, screen necessity, and screen salience to the screener condition the fundamental screening relationship. Analysis of CVC funding termination over a period of two decades confirms our ideas. A policy-capturing study administered to executives with CVC experience offers additional support. Our study thus extends screening theory by identifying the factors that activate a screen within the decision-making process. We also add a unique element to the empirical body of CVC research as we uncover the influence of corporate ownership on CVC decision-making. [ABSTRACT FROM AUTHOR]

Startup accelerators, which aim to improve the set of choices representing a startup's entry strategy, have become increasingly influential in both regional development and the strategies of individual startups. This article explores an accelerator's impact on startup performance and whether that impact varies substantially by features of the startup's founding environment. Leveraging data from a leading startup accelerator, I use a regression discontinuity framework to hold startup quality constant so that I can compare the performance of admitted startups to those that do not make the cut, and I examine whether any observed performance differentials are driven by accelerator admission and by characteristics of the startup's earlier environment. I find evidence that startups from better pre-accelerator environments experience stronger gains from accelerator admission. I also find evidence of home bias, as local startups have a stronger treatment effect. These results provide evidence of ecosystem effects whereby the impact of one organizational sponsor in an ecosystem is strongly moderated by other features in the ecosystem. The findings help to explain the concentration of accelerator programs in already successful entrepreneurial ecosystems and reveal how such programs may interact with founding environments to complement resource abundance or magnify prior resource inequalities. [ABSTRACT FROM AUTHOR]

We exploit the staggered introduction of liability waivers when investors hold stakes in conflicting business opportunities as a shock to venture capital (VC) investment and director networks. After the law changes, we find increases in within-industry VC investment and common directors serving on startup boards. Despite the potential for rent extraction, same-industry startups inside VC portfolios benefit by raising more capital, failing less, and exiting more successfully. VC directors serving on other startup boards are the primary mechanism associated with positive outcomes, consistent with common VC investment facilitating informational exchanges in VC portfolios. Authors have furnished an Internet Appendix , which is available on the Oxford University Press Web site next to the link to the final published paper online. [ABSTRACT FROM AUTHOR]

CONTENTS I. INTRODUCTION 333 II. OVERVIEW OF VENTURE CAPITAL 336 A. What is Venture Capital? 336 B. How are Venture Capital Funds Organized? 337 C. How do Venture Capital Funds [...]

Abstract: Research Summary: We use a novel longitudinal dataset, constructed from 16 downloads of VentureXpert records collected over 20 years, to characterize the international migration of venture‐capital‐backed startups. We find that: (i) 1078 firms in our sample (1.4%) migrate; (ii) countries with high levels of in‐migration also have high levels of out‐migration; (iii) migrating firms move to places with more investors; (iv) pre‐move investors and their connections most strongly predict migration patterns; and (v) movers raise more money than non‐movers, primarily from investors at their destinations. Overall, these patterns appear inconsistent with those expected if startups move primarily in search of talent or customers. Instead, the flows across countries look more like international trade, with startups seeking capital, and social connections between investors defining the shipping lanes. Managerial Summary: Although many high‐profile startups have relocated their headquarters from one country to another, systematic information on this phenomenon has been scarce. How frequently do these moves happen? Why do startups move? Over 20 years, we have built a database that can begin to answer these questions. International moves appear rare. When startups do move, they tend to move to places with more venture capital, particularly when their existing investors have connections in those places. Movers, moreover, raise more money than non‐movers, mostly from investors in their destination countries. Capital availability, rather than access to talent or proximity to customers, appears to be the strongest predictor of startup migration.

Over the past 25 years, the music industry has been radically transformed through the entry of venture capital funded digital platforms. This process continues, but whereas previous generations of tech companies successfully disrupted the industry, a new wave of MusicTech companies now seek to gain entry through collaboration and cooperation, reflecting a stabilisation of economic power in large record companies and platforms. In this paper we examine the business dynamics behind the evolving role of technology in the music industry. More specifically, we reveal the ways in which distinctive features of the music industry set considerable challenges to contemporary MusicTech entrepreneurs in relation to capitalisation and investor reluctance. Through a critical examination of MusicTech as a platform political economy, we draw attention to key business dynamics underpinning wider processes of platform reintermediation and capitalisation that are crucial in the contemporary restructuring of a wide range of economic sectors. [ABSTRACT FROM AUTHOR]

Start-ups are pivotal to economic development and innovation, yet many face failure, often due to limited access to finance. Venture capital emerges as a crucial funding source, yet only a slim fraction of start-ups seeking such investments succeed. This research delves into the allure of venture capital for start-ups and the challenges they encounter in securing funding. Additionally, it explores the perspectives of venture capitalists, identifying key factors influencing their investment decisions. Through a blend of primary and secondary research, including a survey completed by 107 venture capitalists from the author's LinkedIn network, this study offers descriptive insights into the venture capital landscape. The findings underscore the significance of growth potential, industry knowledge, risk mitigation, the ability to secure substantial funding, and increased visibility as factors making venture capital appealing to start-ups. From the venture capitalists' viewpoint, the pivotal elements shaping investment decisions include the quality of the management team, founders' experience and expertise, financial projections, product scalability, and industry attractiveness. Notably, the application of the Friedman two-way analysis of variance by ranks revealed statistically significant differences in the prioritization of these factors, highlighting the nuanced criteria venture capitalists employ in their evaluations. Conversely, the impact of winning prestigious grants appeared minimal, while specialized skills, education, and referrals held moderate importance. This research offers valuable guidance for start-ups, providing a clearer understanding of the criteria emphasized by venture capitalists. Armed with this knowledge, start-ups can refine their strategies to align more closely with investors' priorities, potentially enhancing their prospects of obtaining venture capital funding. [ABSTRACT FROM AUTHOR]

The research aimed to assess the interrelationships among venture capital funding, financial innovation, and operating performance within Nigerian fintech firms. It sought to investigate both the direct associations between these variables and the potential mediating role of financial innovation on the connection between venture capital funding and operating performance, with a focus on understanding their collective impact on the Nigerian fintech landscape. This is essential because the way business is done could be transformed by encouraging fintech innovations which will increase productivity and efficiency. To accomplish this, the study employed a primary data collection method via a questionnaire distributed to senior management personnel in two hundred FinTech companies. 220 senior management participants were purposively selected, and the gathered data underwent meticulous analysis using Partial Least Squares-Structural Equation Modeling (PLS-SEM) alongside various methodologies, including weighted mean scores, Heterotrait-Monotrait Ratio (HTMT), Fornell-Larcker square's average variance extracted, Cronbach alpha, composite reliability (CR), and percentage variance. The findings revealed that the direct influence of venture capital funding on financial innovation yielded non-significant results (R2=0.220, β=0.274, t=1.116, p=0.264). Conversely, the direct impact of financial innovation (FI) on operating performance (OP) exhibited significant results (R2=0.401, β=0.559, t=5.989, p=0.000). Notably, the study discovered that venture capital funding (VC) was statistically insignificant (β=0.274, t=0.3913, p=0.362) in predicting the operating performance of fintech firms in Nigeria. The research established that financial innovation plays a pivotal role in augmenting the operating performance of fintech firms in Nigeria. This study addresses a gap in the literature by investigating the impact of venture capital funding and financial innovation on Nigerian fintech firms' operational performance. It concludes that financial innovation significantly drives operational excellence, while venture capital funding has an insignificant impact, with financial innovation not substantially mediating its influence on performance. The findings underscore the significance of introducing innovative financial products and services, fostering the adoption of a cashless economy, harnessing emerging technologies such as blockchain and Artificial Intelligence, and enhancing financial literacy and awareness. These factors collectively contribute to bolstering the operating performance of fintech enterprises. [ABSTRACT FROM AUTHOR]

Achieving the goals of the 2030 agenda for sustainable development requires substantial investment and depends on the ability to attract private capital to complement public resources. Venture Capital (VC) investments have traditionally focused on sectors such as technology, healthcare, and clean energy, which align closely with the enhancement of sustainable development, and VC investors can accelerate progress toward sustainability by providing expertise and mentorship to startups working on sustainable solutions. This study aims to contribute to the literature on the intersection between finance and sustainability by investigating whether higher VC investments are associated with a higher level of achievement of the Sustainable Development Goals (SDGs). Using a panel data fixed effect model on a sample covering more than 100 countries, we find that a higher level of VC activity is associated with stronger SDGs' performances, with this effect being primarily driven by economic factors. We document heterogeneous effects related to the round of investments as well as the organizational form of VC investors and the industry and country of the VC‐backed companies. [ABSTRACT FROM AUTHOR]

In recent history, institutional investors have increased allocations to alternative assets in an effort to boost portfolio returns. The attention is now turning to individual investors. Significant partnerships, private platforms, and organizations have emerged to democratize access to alternative investments. In 2021, the US Department of Labor also took a position, suggesting that it might be prudent to include private equity in individual retirement accounts, such as in 401(k) and 403(b) plans. While institutional investors have decades of experience investing in alternative assets, the vast majority of individual investors do not. Consequently, relatively little is known about optimal alternative asset allocations for individual investors. This article presents historical risk and return characteristics from private investments including venture capital, private equity, private credit, and real estate, and constructs portfolios building on a traditional 60/40 (public equity/public debt) allocation, with varying levels of a private markets index, to examine portfolio risk and return trade-offs. Findings reveal that there are portfolio benefits to both returns and risk from adding a significant allocation to alternative investments and that wealth impacts can be sizable over time. [ABSTRACT FROM AUTHOR]

The editorial series in the Journal of Wealth Management discusses the impact of superficiality on investment decisions and policymaking. It highlights the role of social networks in promoting superficial decision-making and the creation of narratives to justify certain positions. The articles emphasize the importance of basing advice on hard facts and rigorous analysis, cautioning against false narratives influencing policy decisions. The journal also features articles on goals-based management, capital market assumptions, risk management, taxation of ETFs, calendar anomalies, and private market investments. [Extracted from the article]

Prior research has investigated how the prices of stocks and commodities as well as inflation levels have been affected by the Russian war against Ukraine. So far, however, we know little about the impacts of the war on the entrepreneurial finance sector. Prior research on the effects of unexpected exogenous crisis events on entrepreneurial finance suggests a strong negative impact on new and follow-on funding for entrepreneurial ventures. Our study regards the Russian war against Ukraine as an unexpected exogenous crisis event and explores its impact on the entrepreneurial finance sector. It goes beyond a mere sentiment and impact analysis and also explores the underlying reasons and mechanisms as well as potential response and coping strategies employed by entrepreneurial finance investors. Based on two surveys of European venture capital (VC) and private equity (PE) investors, we find that the war had a strong negative impact on the two types of investors and their respective funds. Both VC and PE investors report more risk-aversion of limited partners (LPs) and LPs leaving the market as important challenges resulting in an overall lower willingness of LPs to invest. This applies in particular to banks, insurance funds, and pension funds. On the portfolio firm level, securing equity financing and maintaining liquidity were considered pressing issues. Overall, the situation seems to be more difficult for portfolio companies of VC as compared to PE investors. For the former, the financing- and liquidity-related issues seem to be more existential and survival-threatening. Responding to these challenges, both VC and PE investors altered their industry focus and put more emphasis on entrepreneurial experience. Financial investment selection criteria such as financial valuation, profitability, and cash- as well as revenue-generating capacity also increased in importance. Again, differences between VC and PE investors exist. Our study has implications for entrepreneurial finance theory and practice and concludes with an agenda for research on the impacts of the Russian war against Ukraine on entrepreneurial finance. [ABSTRACT FROM AUTHOR]

Although the importance of venture capital has been recognized in innovation literature, we know relatively little about how and to what extent it influences regional technology commercialization. Using a city-level data set that includes 225 cities in China, we identify the possible economic channels through which regional venture capital development affects technology commercialization. Our findings indicate that cities with better developed venture capital market exhibit higher technology commercialization performance. Furthermore, enhancing technology search efficiency, strengthening collaboration between universities and businesses, and providing sufficient funding are three possible channels that allow venture capital to promote technology commercialization. Our results offer new insights into the effects of venture capital development on technology innovation, especially complementing the literature on innovation from the perspective of technology commercialization. [ABSTRACT FROM AUTHOR]

The article is devoted to a comprehensive analysis of the process of implementation of the European Union (EU) acts in the field of capital markets into Ukrainian legislation. The author examines the international legal basis of this process and describes the main stages of Ukraine’s relations with the EU in relation to the approximation of Ukrainian legislation to the EU acquis. The author also examines the key documents that define the relations between Ukraine and the EU in the context of European integration, including the 1994 EU-Ukraine Partnership and Cooperation Agreement and the 2014 EU-Ukraine Association Agreement. The article analyses in detail the reports of the European Commission on Ukraine’s progress in approximating its legislation to the EU acquis in the field of capital markets. The main achievements and areas requiring further improvement are highlighted. In particular, the author examines the issues of capital market supervision, rating of financial instruments, and such mechanisms for raising funds as securitisation and covered bonds. The author examines the internal aspects of bringing Ukrainian legislation in line with EU requirements, including legislative plans and current draft laws. Particular attention is paid to the analysis of recently adopted laws aimed at bringing Ukrainian legislation closer to the EU acquis in the field of capital markets. The article also examines the priority areas for further work on the implementation of EU acts, including improving legislation on combating capital market abuse, creating a mechanism for compensation to investors in securities, strengthening the supervisory powers of the National Securities and Stock Market Commission, and introducing certain types of collective investment institutions that operate in the EU but are not currently provided for in Ukrainian legislation, such as European long-term investment funds, venture capital funds, and other types of collective investment institutions. Based on the analysis, the author formulates recommendations for improving the implementation process, including strengthening coordination between various government agencies, attracting international technical assistance and holding broad consultations with market participants [ABSTRACT FROM AUTHOR]

Firms can derive insights not only from their own failures but also from the innovation failures of counterparts in the same industry. This study investigates how 109 Chinese A‐share listed high‐tech firms (2013–2022) learn from counterparts' innovation failures to improve their success rate of innovation and emphasizes the crucial role of venture capital (VC) syndication networks in facilitating knowledge transfer. Central VCs within the network notably enhance vicarious learning from others' failures. Further empirical analysis shows a significant increase in the success rate of exploitative innovations, while the impact on exploratory innovations is minimal. [ABSTRACT FROM AUTHOR]

We investigate the prevalence of capital staging (sequential infusion of capital) in the IPO markets in 47 countries between 1991 and 2019. Our evidence is consistent with the hypothesis that investors provide funds to IPOs in stages to mitigate costs associated with firm-specific uncertainty about future prospects and information asymmetry. Going public firms with more intangible assets and greater R&D intensity raise less money relative to financing needs at the time of the IPO and are more likely to return to capital markets for subsequent financing and do so more frequently. We also document that the evidence of staged financing is stronger in countries that provide better legal protection to investors. Plain English Summary: We show that the staging of capital infusions, which is pervasive in the venture capital market, is also evident in the IPO markets around the world. Using a large sample of firms from 47 countries that went public from 1991 to 2019, we show that firms with greater uncertainty about future prospects and information asymmetry are "kept on a short leash": They are provided less money at the time of the IPO and are more likely to return to capital markets for follow-on financing and do so more frequently. The evidence of staged financing is stronger in countries that provide better legal protection to investors. [ABSTRACT FROM AUTHOR]

Background: Digital innovations can reduce the global burden of depression by facilitating timely and scalable interventions. In recent years, the number of commercial Digital Health Interventions for Depression (DHIDs) has been on the rise. However, there is limited knowledge on their content and underpinning scientific evidence. This study aimed to: (i) identify the top-funded companies offering DHIDs and (ii) provide an overview of their interventions, including scientific evidence, psychotherapeutic approaches and use of novel technologies. Methods: A systematic search was conducted using two venture capital databases to identify the top-30 funded companies offering DHIDs. In addition, studies related to the DHIDs' were identified via academic databases and hand-searching. The methodological quality of the publications was evaluated using the Mixed Methods Appraisal Tool. Results: The top-30 funded companies offering DHIDs received a total funding of 2,592 million USD. Less than half of the companies produced any scientific research associated with their DHIDs, with a total of 83 publications identified. Twenty-five publications were randomised control trials, of which 15 reported moderate-to-large effects in reducing depression symptoms. Regarding novel technologies, few DHIDs incorporated the use of conversational agents or low-burden sensing technologies. Conclusions: Funding received by top-funded companies was not related to the amount of scientific evidence provided on their DHIDs. There was a strong variation in the quantity of evidence produced and an overall need for more rigorous effectiveness trials. Few DHIDs used automated approaches such as conversational agents, limiting their scalability. [ABSTRACT FROM AUTHOR]

The media narrative around the exceptional rise and fall of Elizabeth Holmes is crafted out of the ideological interplay between the logics of American neoliberal capitalism and popular feminism within the microcosm of Silicon Valley—itself machinated by venture capital, fueled by libertarian techno-determinism, and Sheryl Sandberg's Lean In appropriation of feminism. Holmes's celebrity, coinciding with the proliferation of national discourse around the "gender problem" in STEM, placated neoliberal and popular feminism's calls for representation in a space that, per these ongoing discourses on diversity and inclusion, needed her visibility. Holmes's media visibility grafted over the void of women's representation within the notorious boys' club of Silicon Valley under the American veneer of meritocracy. Holmes's celebrity making, subsequent unmasking, and continued retelling through various fictional portrayals point to the inherent tensions in neoliberal logics and the superficiality of visibility, furthering the erasure of structural, material, and intersectional inequalities. [ABSTRACT FROM AUTHOR]

The study explores Open Innovation practices adopted by large firms in low- and medium-technology industries to foster innovation when the integration of distant knowledge from far scientific and technological fields is required. The study performs an explanatory single case study methodology. It focuses on the Italian food producer Barilla and its Blu1877 corporate venture capital fund to explore innovations in the food and agri-tech domains. It emerges that, with the intent to create and orchestrate an Open Innovation Ecosystem, Barilla moves across two main trajectories: (i) the search for external knowledge and expansion of network for new markets and technology exploration, and (ii) the support and mentorship of innovative start-ups that explore and develop novel ideas and technologies. The resulting Open Innovation Ecosystem has become the locus where innovations are developed by sharing knowledge, competencies, and capabilities among diverse actors and where companies can promote a transition toward the opening of their organisational boundaries. [ABSTRACT FROM AUTHOR]

As the Financial Times has suggested, Britain is increasingly a poor country with a small number of very rich people. Universities are being allocated additional responsibility for levelling up and for acting as civic institutions in support of regional development. This requires substantive engagement with those communities most excluded from higher education, both in the co-production of research by which to inform policy development and in providing pathways to study. This research note has been produced by a group of academics and outreach professionals centrally concerned with addressing inequality and making higher education accessible for all. It presents the collective experience of the group in identifying obstacles. We call on colleagues, universities and policymakers to engage seriously in policy development to ensure that people from the communities we serve are allocated essential material resources, provided with the means to overcome spatial barriers and supported in developing seed capital. In general, we believe that there is a need for genuine collective action in advancing equity at a time of serious challenges to our society and sector. [ABSTRACT FROM AUTHOR]

This study investigates how economic policy uncertainty (EPU) impacts the syndication behaviors of venture capital firms (VCs). Analyzing data from China, we find that EPU boosts the likelihood that VCs take syndicated investments. When facing great EPU, compared with their domestic and private counterparts, foreign and state-backed VCs exhibit a greater propensity for syndication, particularly in collaboration with VCs from distinct capital backgrounds. Further, EPU reduces VCs' risk-taking tendencies and exacerbates inadequate information exchange in the market, thereby making VCs more inclined to syndicate their investments. Finally, EPU adversely affects VCs' exit performance, but syndication helps alleviate this impact. [ABSTRACT FROM AUTHOR]

In this review, we explore the scientific landscape regarding Business Angels (BAs), a person who decides to offer their skills to improve the community where they live, distinguishing the different ways in which it is possible to contribute. This systematic review starts with a precise definition of what a BA is in terms of goals, strategies, and intervention area, which could be in social, environmental, technological, or educational areas, differentiating a BA from other kinds of stakeholders, revealing some precise influences due to different cultures or entrepreneurial ecosystems. We are talking about a person who is authoritative not only in terms of competence, knowledge, and skills but who is also noteworthy in terms of moral stature and accountability. We used three databases, SCOPUS, WOS, and EBSCO, using VosViewer to create cluster mapping to differentiate the various areas of research on this topic. We revealed three clusters, namely Business Angel, entrepreneurship, and venture capital, that clarify different facets of the construct. BA activities are very different from conventional strategies and protocols. BAs can operate in innovative areas, bring their own technologies to improve capabilities, handle projects related to sustainability and innovation, and even address social functions and social cohesion. [ABSTRACT FROM AUTHOR]

Research Summary: Government involvement plays a significant role in fostering entrepreneurship. We examine how government involvement in venture capital (VC) investments shapes the decoupling between risk‐taking and investment returns. We distinguish government involvement through state ownership (GVC) and personal political connections (connected VC). We theorize that government involvement through GVC is associated with the downside risk–return paradox, that is, concurrent higher risk‐taking and lower‐than‐expected returns. In contrast, government involvement through connected VCs is linked to the upside risk–return paradox, that is, concurrent lower risk‐taking and higher‐than‐expected returns. Our theoretical predictions receive general support from analyses using longitudinal data from VC firms in China. Our study sheds light on the heterogeneity in the decoupling between risk and return and the underlying mechanisms through which governments influence entrepreneurship. Managerial Summary: Governments often seek to promote entrepreneurship; yet, their involvement in start‐ups tends to deviate from the conventional wisdom of a positive risk–return association. Government‐owned venture capital (VC) firms tend to take greater risks and invest in earlier‐stage start‐ups, but yield lower returns from their investments. Conversely, VC firms that have personal ties to government officials tend to take lower risks and prefer later‐stage start‐ups, yet achieve higher returns. These intriguing findings reveal the complexities of government participation in entrepreneurial activities and offer valuable insights for policy formulation. In addition, our findings highlight the importance for entrepreneurs to recognize diverse goals and resources in government involvement. Considering this when seeking external financing is helpful in positioning start‐ups for growth and success. [ABSTRACT FROM AUTHOR]

This study shows that, unlike the positive role played by other institutional investors documented in the literature, venture capital (VC) in pursuit of short‐term gains through exit strategies reduces the stock price informativeness of portfolio companies, especially when VC is associated with a higher level of the ability (longer‐term VC directors, large VC syndicate), incentive (private VC sponsors), and willingness (less reputable VCs) to manipulate information. Furthermore, internal and external monitoring helps mitigate the negative impact of VC on stock price informativeness. Finally, earnings management and reduced information disclosure mediate the relationship between VC involvement and stock price informativeness. [ABSTRACT FROM AUTHOR]

AbstractThe 2010s were an era of abundant capital for investors but limited opportunities to put it to profitable use. This paper traces the origins of dealing with the ‘problem’ of having to convert large accumulations of cash into appreciating assets. It puts venture capitalists in the US at the center of this history. Charting venture capital’s 1950s emergence, 1960s formalization, and 1970s institutionalization, I show how early venture capital investors built a financial infrastructure that safeguarded the appreciation of their assets. Venture capitalists’ influence increased as institutional investors (as funders) and startup employees (as investees) became enrolled in this infrastructure and oriented their actions toward its imperatives. I argue that in their handling of abundance, venture capitalists constructed and deepened asset-driven inequalities. Empirically, the paper makes a contribution by demonstrating that vast accumulations of (personal) wealth played a decisive role in this process and highlights the importance of stark inequality well before the neoliberal turn or quantitative easing. Conceptually, I show that venture capitalists’ solution to a personal problem became useful at a much larger scale. The paper argues that we should read this influence as conditioned on elite surplus and access to a financial infrastructure. [ABSTRACT FROM AUTHOR]

This study investigates the effects of government venture capitals (GVCs) backing on the productivity of startups compared to private venture capitals (PVCs). Based on a sample of 1,149 artificial intelligence startups in South Korea, we find that startups backed by GVCs show better productivity than those backed by PVCs. In examining the underlying mechanism of such higher performance by GVC-backing, we find that GVC-backed startups are more likely to acquire proprietary data and join R&D testbed programmes, thus leading to better productivity compared with PVC-backed startups. We interpret our findings as evidence of the positive abilities of GVCs as intermediaries for their portfolio startups. [ABSTRACT FROM AUTHOR]

The role of venture capital in promoting entrepreneurship and funding innovation cannot be underestimated. However, it is important to acknowledge noteworthy concerns associated with collusive behavior in the venture capital process. "Guanxi" is a relatively intimate and closed social relationship, which can impact venture capital through trust and social obligations. Drawing on the theories of unethical pro-relational behavior and social networks, using data from GEM-listed companies supported by venture capital from 2009 to 2021, this research investigates the phenomenon of collusion behavior between venture capitalists and entrepreneurs, with a particular focus on the influence of "guanxi". The research finds that the presence of "guanxi" between venture capitalists and entrepreneurs tends to facilitate collusive behavior. Specifically, "guanxi" tends to increase entrepreneurial self-interest behavior, and venture capitalists' returns, infringe upon minority shareholders' interests, and increase corporate operational risk. Moreover, the study further explores the moderator effect of equity incentives on such collusion behavior. This research not only enriches the theoretical framework of the relationship between "guanxi" and venture capital activities but also provides insight into the ethical implications associated with "guanxi", contributing to the broader literature on social relationships and unethical behavior. [ABSTRACT FROM AUTHOR]

The pandemic has brought extraordinary attention (and therefore funds) to the medical technology (medtech) sector. The urgent need for innovation in this industry is widely acknowledged; thus, venture capitalists (VCs) are playing a major role in supporting its renovation. The present research aims to identify how venture capitalists approach medtech companies, which are typically perceived as considerably risky. Specifically, the objective is to highlight the features of the control mechanisms employed by VCs when financing firms operating in the health care industry, with explicit focus on the staged structure of the investment. Previous studies have supported the hypothesis of shorter financing rounds with higher required equity stakes when a VC firm approaches a hazardous investment. To test the consistency of such evidence with the case of medtech firms, two sets of regressions on a unique dataset have been performed. The results reported show partial suitability of the expectations to the specific case. [ABSTRACT FROM AUTHOR]

Contractual agreements in venture capital, which are the primary sources of financing for startups, can be divided into three categories: financial, control and exit agreements. Exit agreements refer to provisions that aim to facilitate investor's access to a successful and efficient exit from a venture-backed business, which is the ultimate and most important phase of venture capital process. Among the exit agreements, two provisions directly affect the transfer of shares to third parties, which is one of the primary and common strategies of the exit of venture capitalists and the liquidity of their shares. These two provisions, which are called the "exit agreements affecting the transfer of shares to third parties in venture capital", are the "Drag-Along Right" and "Tag-Along Right". Investigating nature and function of the aforementioned contractual provisions and examining their conformity with the relevant legal rules and jurisprudential principles, reveals that despite doubts, in Iranian legal system, implementing these important and useful provisions as legitimate and specified agreements that do not conflict with imperative provisions, will not face any legal obstacle relying on the principles of freedom and validity of contracts. [ABSTRACT FROM AUTHOR]

Purpose: This historical example of the creation of the arms industry in the Connecticut River Valley in the 1800s provides new insights into the value of government venture capital (GVC) and government demand in creating a new industry. Since current theoretical explanations of the best uses of governmental venture capital are still under development, there is considerable need for further theory development to explain and predict the creation of an industry and especially those industries where failures in private capital supply necessitates governmental involvement in new firm creation. The purpose of this paper is to provide an in depth historical review of how the arms industry evolved spurred by GVC and government created demand. Design/methodology/approach: This study uses abductive inference as the best way to build and test emerging theories and advancing theoretical explanations of the best uses of GVC and governmental demand to achieve socially required outcomes. Findings: By observing this specific historical example in detail, the authors add to the understanding of value creation caused by governmental venture capital funding of existing theory. A major contribution of this paper is to advance theory based on detailed observation. Originality/value: The relatively limited research literature and theory development on governmental venture capital funding and the critical success factors in startups are enriched by this abductive investigation of the creation of the historically important arms industry and its spillover into creating the specialized machine industry. [ABSTRACT FROM AUTHOR]

We show theoretically that a critical determinant of the attractiveness of venture capital (VC)‐backed entrepreneurship for high‐earning potential founders is the expected time to develop a startup's initial product. This is because founder‐CEOs' cash compensation increases substantially after product development, alleviating the nondiversifiable risk that founders face at startup birth. Consistent with the model's predictions of where the supply of entrepreneurial talent is likely to be most constrained, we find that technological shocks differentially altering the expected time to product across industries can explain changes in both the rate of entry and characteristics of individuals selecting into VC‐backed entrepreneurship. [ABSTRACT FROM AUTHOR]

Funding is an essential factor for the viability and growth of startups. As a result, business angels play a crucial role in providing financial support to these business companies, particularly those that are innovative and have significant potential for growth. This study sought to determine the role business angels play in the early-stage financing of startups. Specifically, the study looked at the value-added services provided by business angels, business angel funding impact on startup survival rates, the effectiveness of business angel networks' impact on facilitating startup funding, and business angels' contribution to the development of entrepreneurial ecosystems beyond financial investment for startups. This study adopted a systematic literature review methodology, employing key theoretical methods such as analysis, synthesis, comparison, and induction to assess the role business angels play in the early-stage financing of startups. The findings show that business angels' expertise, networks, and mentorship emerge as critical value-added startup services. Similarly, it was found that business angel funding positively influences startup survival; however, other factors also influence this impact. Moreover, the results show that business angel networks play a significant role in facilitating startup funding. Furthermore, beyond financial investment for startups, it was found that business angels contribute significantly to the development of entrepreneurial ecosystems, including prioritizing the contributions of ecosystem builders in startup screening, access to mentoring, and entrepreneurial education. The study concluded that business angels play a positive role in the early-stage financing of startups. [ABSTRACT FROM AUTHOR]

Government-sponsored venture capital (GVC) has been used to support financially constrained start-ups as an important policy tool in China. Typically, to motivate the social capital to invest in start-ups, GVC provides subsidies for them to bridge the funding gap in the early-stage venture capital market. However, the effect and mechanism of GVC affecting social capital investment have not been clearly studied. In this paper, the authors not only develop a game model to analyze this issue in theory, but conduct an empirical study by analyzing the 14741 records matched by propensity score matching (PSM) of Chinese venture capital market data from 2011 to 2021. The proposed findings are as the follows. Firstly, the subsidies offered by GVC will simultaneously increase the returns and risks of investments in start-ups of social capital with more volatile incentive effect of GVC. The incentive effect of GVC is only effective when the returns resulting from the subsidies outweigh the risks they introduce. In the context of the Chinese venture capital market, the incentive effect of GVC is effective. Secondly, the incentive effect of GVC is more pronounced in high-tech industries, which can be attributed to the signaling effect facilitated by GVC. In this context, the subsidy mainly helps social capital to bear the costs associated with screening potential investments. Thirdly, the incentive effect of GVC is more significant in underdeveloped venture capital markets, which can be explained by the "virtuous cycle" effect, in which GVC plays a pioneering role in establishing a more robust early-stage market trading system. By examining these three points, this study contributes to a better understanding of how GVC can effectively guide social capital investment, especially in the Chinese landscape. [ABSTRACT FROM AUTHOR]

We analyze the initial intellectual property (IP) decisions of 336 start-ups in IP-intensive industries in China, distinguishing among patents, trademarks, and IP portfolios. Our empirical results show that the initial IP decisions of start-ups have an impact on their innovation performance. Compared with start-ups that choose trademarks or patents, start-ups that choose IP portfolios have higher financial and non-financial innovation performance. Furthermore, venture capital positively moderates the relationship between initial IP decisions and non-financial innovation performance. VC-backed start-ups that choose IP portfolios are more likely than other start-ups to achieve higher non-financial innovation performance. Finally, strategic planning also plays a role in the relationship. Among the start-ups that choose IP portfolios, those with high strategic planning gain higher non-financial innovation performance. This paper contributes to research on initial IP decisions in entrepreneurial contexts by incorporating IP portfolios to initial IP decisions and uncovering the role of initial IP decisions in innovation performance. [ABSTRACT FROM AUTHOR]

Intellectual capital (IC) and venture capital (VC) play an important role in enterprise development. While the literature has investigated the relationship between IC and the profitability of companies, the relationship among IC, VC and enterprise value (EV) is still not well understood. Drawing insights from the literature, we develop a few testable hypotheses about the relationships among IC, VC and EV. Using the panel data of companies listed in the Chinese stock market from 2009 to 2019, we employ fixed-effects regression models to test these hypotheses. We find that IC has a significant positive effect on long-term EV. VC is found to have a positive direct effect on long-term EV but has a negative direct effect when its moderating effect with IC is considered. To explain this finding, we develop a simple economic model and provide an over-investment perspective. We believe this paper can shed light on pro-venture investment policies in China, as well as provide indications for similar policies around the world.