ACE research vignette 030 : Is venture capital investment the key to success?

This series of research vignettes is aimed at sharing current and interesting research findings from our team of international Entrepreneurship researchers. This vignette, written by Professor Per Davidsson, reports on a paper which synthesizes available research on the effects of VC funding on the performance of the funded firm.

What Drives Venture Capital Fundraising in India: An Empirical Analysis of Systematic and Non-Systematic Factors

In this paper, we develop a consolidated Supply-Demand framework of the Venture Capital (VC) ecosystem for India. Further, we empirically analyze the supply side of this ecosystem to ascertain the influence of systematic (macro) and non-systematic (micro) factors on VC fundraising. At the macro level, our results indicate that relatively strong fundamentals of the Indian economy in the past decade as compared with the severe recessionary tendencies in the developed economies have been critical in determining the aggregate volume of VC fundraising. Among the micro factors, past performance and reputation of the individual fund managers have been instrumental in determining their fund raising potential.

El Venture capital como fuente de financiación del proceso emprendedor

En los últimos años la financiación de empresas de nueva creación se ha convertido en uno de los principales obstáculos para los emprendedores a la hora de poner en marcha sus ideas de negocio. La difícil situación económico-financiera actual y las características particulares de estas empresas hacen que la financiación bancaria sea una alternativa más bien inviable. Este trabajo pretende explorar otras fuentes de financiación alternativas a la bancaria que se puedan ajustar más a las características de las empresas de reciente creación y, más en concreto, estudiar el papel que ha jugado y juega el venture capital como fuente de financiación, analizando aspectos teóricos del mismo y su evolución en los últimos años para, posteriormente, desarrollar un estudio empírico que analice las características y resultados obtenidos por las empresas financiadas por venture capital en España en los últimos años.

External corporate venture capital investment: Towards a framework for capturing and measuring strategic value

This paper presents the initial results of on-going research in the field of external Corporate Venture Capital (CVC) investments, i.e. equity investments of large corporations in entrepreneurial ventures which originated outside the corporation. The research is motivated by the fact that external CVC plays an increasingly important role within the strategy of corporations. Driven by a general trend towards a more open approach to innovation, companies see particular value in external corporate venturing as a tool to gain, for example, access to complementary technologies and a general window on technology developments. The review of literature in the field of external corporate venturing clearly reveals that theoretical gaps exist in understanding mechanisms for capturing value and measurements of this value. To help close these gaps, the research addresses the underlying question "How do corporations and start-ups capture and measure strategic value through external CVC investments" by using embedded, multiple case studies. Following an initial set of case studies, steps towards the development of a framework for capturing and measuring strategic value from CVC investments are outlined within this paper and the resulting preliminary framework is presented. The paper closes with an outlook on ongoing and future research steps. © 2009 PICMET.