The first step of the capital flow from institutions to entrepreneurs : the criteria for sorting venture capital funds - Archive ouverte HAL Accéder directement au contenu
Article Dans Une Revue European Financial Management Année : 2011

The first step of the capital flow from institutions to entrepreneurs : the criteria for sorting venture capital funds

Résumé

We contribute to the knowledge of the capital flow from institutional investors via venture capital (VC) funds as intermediaries to their final destination, entrepreneurial ventures. To this end, we conduct a world-wide survey among limited partners to determine the importance of several criteria when they select VC funds. We find the top criteria to be the expected deal flow and access to transactions, a VC fund’s historic track record, his local market experience, the match of the experience of team members with the proposed investment strategy, the team’s reputation, and the mechanisms proposed to align interest between the investors and the VC funds. A principal component analysis reveals three latent drivers in the selection process: ‘Local Expertise and Incentive Structure’, ‘Investment Strategy and Expected Implementation’, and ‘Prestige/Standing vs. Cost’. It becomes evident that limited partners search for teams which are able to implement a certain strategy at a given cost. Thereby, they focus on an incentive structure that limits agency costs.
Fichier non déposé

Dates et versions

hal-02312606 , version 1 (06-03-2020)

Identifiants

  • HAL Id : hal-02312606 , version 1

Citer

Alexander Groh, Heinrich Von Liechtenstein. The first step of the capital flow from institutions to entrepreneurs : the criteria for sorting venture capital funds. European Financial Management, 2011, 17 (3), pp.532-559 P. ⟨hal-02312606⟩

Collections

EMLYON
29 Consultations
0 Téléchargements

Partager

Gmail Mastodon Facebook X LinkedIn More