Start-Up Investment with Scarce Venture Capital Support
By V. Kanniainen, C. Keuschnigg. Social Science Research Network, 2004
243 citations recorded by the source corpus.
Abstract Venture capitalists, representing informed capital, screen, monitor and advise start-up entrepreneurs. The paper reports three new results on venture capital (VC) finance and the evolution of the VC industry. First, there is an optimal VC portfolio size with a trade-off between the number of companies and the value of managerial advice. Second, advice tends to be diluted when the industry expands and VC skills remain scarce in the short-run. The delayed entry of experienced VCs eventually restores the quality of advice and leads to more focused company portfolios. Third, as a welfare result, VCs tend to provide too little advisory effort and to invest in too few companies. Testable implications are also discussed.
Subfields: Accounting
View Paper: https://www.semanticscholar.org/paper/2b594a339dd05059a541b211da41c188c844ebda
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Accounting
- Douglas J. Cumming
- Luca Grilli
- Samuele Murtinu
- Sofia Johan
- C. Keuschnigg
- V. Kanniainen
- F. Bertoni
- Armin Schwienbacher
Citations in the corpus
- The Optimal Portfolio of Start-Up Firms in Venture Capital Finance (2000, background): “A companion paper (Kanniainen and Keuschnigg, 2001) intends to explore how this trade-off might affect the structure of venture capital investing in market equilibrium and thereby shape the evolution of the venture capital industry.”
- Taxation of a Venture Capitalist with a Portfolio of Firms (2004, unknown): “Kanniainen and Keuschnigg (2003) have introduced the concept of an optimal VC portfolio and pointed to a fundamental trade-off between portfolio size and the degree of VC involvement.”
- Governmental and independent venture capital investments in Europe: a firm-level performance analysis (2017, background): “…when bargaining with banks and other 3 perform coaching (Sahlman, 1990; Groh et al., 2010) and monitoring activities (Gompers, 1995; Lerner, 1995; Kanniainen and Keuschnigg, 2003, 2004; Wang and Zhou, 2004; Giot and Schwienbacher, 2007; Hege et al., 2009; Cressy et al., 2007; Dihiya and Ray,…”
- Assessing the impact of public venture capital programmes in the United Kingdom: : Do regional characteristics matter? (2015, unknown): “In this latter case, indirect support occurs since the government (or other regional or local public authorities) invests as a limited partner in one or more professional venture capital funds (Poterba, 1989, Gilson, 2002, Kanniainen and Keuschnigg, 2004, Avnimelech and Teubal, 2006, Cumming, 2007).”