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Venture Capital
Recent years have witnessed massive development in both the venture capital market and in academic research relating to this market. The aims of this timely collection are to identify leading contributions to this developing area from the past two decades; to reflect the growing multi-disciplinarity of research on venture capital; and to highlight the need to recognize international differences in venture capital markets.
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Critical Acclaim
Contributors
Contents
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Recent years have witnessed massive development in both the venture capital market and in academic research relating to this market. The aims of this timely collection are to identify leading contributions to this developing area from the past two decades; to reflect the growing multi-disciplinarity of research on venture capital; and to highlight the need to recognize international differences in venture capital markets.
The editors have written an authoritative overview, signaling where venture capital research has come and where it is going. This is a vital collection of writings for those wanting to become familiar with venture capital research.
The editors have written an authoritative overview, signaling where venture capital research has come and where it is going. This is a vital collection of writings for those wanting to become familiar with venture capital research.
Critical Acclaim
‘. . . provides an interesting insight into the field of venture capital research. . . a valuable collection of papers. . . This collection represents a major, and necessary, retrospective overview of US and US-inspired venture capital research from the standpoint of the year 2000 peak in the venture capital market.’
– Richard Harrison, International Small Business Journal
‘The editors are well placed, given their own substantial work on the subject, to produce an authoritative collection of articles on venture capital. They have assembled all of the influential articles on venture capital in an accessible and well structured set of three volumes. Quite simply, I doubt whether this collection of articles could be bettered in either structure or content – it is a must read/purchase for anybody interested in the subject of venture capital.’
– Kevin Keasey, University of Leeds, UK
‘This volume provides a comprehensive and very useful compilation of academic research on venture capital. As such, it is a great resource for researchers interested in venture capital.’
– Steven N. Kaplan, University of Chicago Graduate School of Business, US
– Richard Harrison, International Small Business Journal
‘The editors are well placed, given their own substantial work on the subject, to produce an authoritative collection of articles on venture capital. They have assembled all of the influential articles on venture capital in an accessible and well structured set of three volumes. Quite simply, I doubt whether this collection of articles could be bettered in either structure or content – it is a must read/purchase for anybody interested in the subject of venture capital.’
– Kevin Keasey, University of Leeds, UK
‘This volume provides a comprehensive and very useful compilation of academic research on venture capital. As such, it is a great resource for researchers interested in venture capital.’
– Steven N. Kaplan, University of Chicago Graduate School of Business, US
Contributors
65 articles, dating from 1984 to 2001
Contributors include: R. Amit, W.D. Bygrave, P. Gompers, J. Lerner, I. MacMillan, L. Steier
Contributors include: R. Amit, W.D. Bygrave, P. Gompers, J. Lerner, I. MacMillan, L. Steier
Contents
Contents:
Volume I
Acknowledgements
Introduction Mike Wright, Harry J. Sapienza and Lowell W. Busenitz
PART I SYSTEMIC ISSUES: EARLY VIEWS
1. Tyzoon T. Tyebjee and Albert V. Bruno (1984), ‘A Model of Venture Capitalist Investment Activity’
2. Jeffry A. Timmons and William D. Bygrave (1986), ‘Venture Capital’s Role in Financing Innovation for Economic Growth’
3. Michael Gorman and William A. Sahlman (1989), ‘What Do Venture Capitalists Do?’
PART II SYSTEMIC ISSUES: MACRO-PERSPECTIVES OF THE 1990s
4. Sophie Manigart (1994), ‘The Founding Rate of Venture Capital Firms in Three European Countries (1970–1990)’
5. Gordon C. Murray (1995), ‘Evolution and Change: An Analysis of the First Decade of the UK Venture Capital Industry’
6. Raphael Amit, James Brander and Christoph Zott (1998), ‘Why Do Venture Capital Firms Exist? Theory and Canadian Evidence’
7. Bernard S. Black and Ronald J. Gilson (1998), ‘Venture Capital and the Structure of Capital Markets: Banks Versus Stock Markets’
8. Leslie A. Jeng and Philippe C. Wells (2000), ‘The Determinants of Venture Capital Funding: Evidence Across Countries’
PART III POLICY ISSUES AND TECHNOLOGY-BASED VENTURES
9. Juan B. Roure and Robert H. Keeley (1990), ‘Predictors of Success in New Technology Based Ventures’
10. Gordon C. Murray (1998), ‘A Policy Response to Regional Disparities in the Supply of Risk Capital to New Technology-based Firms in the European Union: The European Seed Capital Fund Scheme’
11. Urs von Burg and Martin Kenney (2000), ‘Venture Capital and the Birth of the Local Area Networking Industry’
12. Samuel Kortum and Josh Lerner (2000), ‘Assessing the Contribution of Venture Capital to Innovation’
PART IV FUNDS PROVIDERS
13. William A. Sahlman (1990), ‘The Structure and Governance of Venture-Capital Organizations’
14. Kevin N. McNally (1994), ‘Sources of Finance for UK Venture Capital Funds: The Role of Corporate Investors’
15. Paul Gompers and Josh Lerner (1996), ‘The Use of Covenants: An Empirical Analysis of Venture Partnership Agreements’
16. Ken Robbie, Mike Wright and Brian Chiplin (1997), ‘The Monitoring of Venture Capital Firms’
17. Edgar Norton and Bernard H. Tenenbaum (1993), ‘Specialization versus Diversification as a Venture Capital Investment Strategy’
Name Index
Volume II
Acknowledgements
An introduction by the editors to all three volumes appears in Volume I
PART I DEAL GENERATION, SCREENING AND ASSESSMENT
1. Ian C. MacMillan, Robin Siegel and P.N. Subba Narasimha (1985), ‘Criteria Used by Venture Capitalists to Evaluate New Venture Proposals’
2. Raphael Amit, Lawrence Glosten and Eitan Muller (1990), ‘Entrepreneurial Ability, Venture Investments, and Risk Sharing’
3. Michael G. Harvey and Robert F. Lusch (1995), ‘Expanding the Nature and Scope of Due Diligence’
4. James O. Fiet (1995), ‘Reliance upon Informants in the Venture Capital Industry’
5. Dan Muzyka, Sue Birley and Benoit Leleux (1996), ‘Trade-offs in the Investment Decisions of European Venture Capitalists’
6. Geoffrey H. Smart (1999), ‘Management Assessment Methods in Venture Capital: An Empirical Analysis of Human Capital Valuation’
7. Dean A. Shepherd (1999), ‘Venture Capitalists’ Assessment of New Venture Survival’
8. Andrew L. Zacharakis and Dean A. Shepherd (2001), ‘The Nature of Information and Overconfidence on Venture Capitalists’ Decision Making’
PART II VALUATION AND STRUCTURING
9. William D. Bygrave (1988), ‘The Structure of the Investment Networks of Venture Capital Firms’
10. Lloyd Steier and Royston Greenwood (1995), ‘Venture Capitalist Relationships in the Deal Structuring and Post-Investment Stages of New Firm Creation’
11. Sophie Manigart, Koen De Waele, Mike Wright, Ken Robbie, Philippe Desbrières, Harry Sapienza and Amy Beekman (2000), ‘Venture Capitalists, Investment Appraisal and Accounting Information: A Comparative Study of the USA, UK, France, Belgium and Holland’
PART III FINANCIAL CONTRACTING
12. Anat R. Admati and Paul Pfleiderer (1994), ‘Robust Financial Contracting and the Role of Venture Capitalists’
13. Thomas Hellmann (1998), ‘The Allocation of Control Rights in Venture Capital Contracts’
14. Andrei A. Kirilenko (2001), ‘Valuation and Control in Venture Finance’
PART IV STRATEGIES OF VENTURE CAPITAL FIRMS
15. Anil K. Gupta and Harry J. Sapienza (1992), ‘Determinants of Venture Capital Firms’ Preferences Regarding the Industry Diversity and Geographic Scope of their Investments’
16. Richard B. Carter and Howard E. Van Auken (1994), ‘Venture Capital Firms’ Preferences for Projects in Particular Stages of Development’
17. James O. Fiet (1995), ‘Risk Avoidance Strategies in Venture Capital Markets’
18. Dirk De Clercq, Philip K. Goulet, Mikko Kumpulainen and Manu Mäkelä (2001), ‘Portfolio Investment Strategies in the Finnish Venture Capital Industry: A Longitudinal Study’
PART V SUCCESS FACTORS, RETURNS AND PERFORMANCE
19. William A. Sahlman and Howard H. Stevenson (1985), ‘Capital Market Myopia’
20. David J. Brophy and Mark W. Guthner (1988), ‘Publicly Traded Venture Capital Funds: Implications for Institutional “Fund of Funds” Investors’
21. Paul Gompers and Josh Lerner (2000), ‘Money Chasing Deals? The Impact of Fund Inflows on Private Equity Valuations’
22. Thomas Hellmann and Manju Puri (2000), ‘The Interaction Between Product Market and Financing Strategy: The Role of Venture Capital’
Name Index
Volume III
Acknowledgements
An introduction by the editors to all three volumes appears in Volume I
PART I POST-INVESTMENT INVOLVEMENT: MONITORING AND PROTECTING VALUE
1. Joseph Rosenstein (1988), ‘The Board and Strategy: Venture Capital and High Technology’
2. Ian C. MacMillan, David M. Kulow and Roubina Khoylian (1989), ‘Venture Capitalists’ Involvement in their Investments: Extent and Performance’
3. Joseph Rosenstein, Albert V. Bruno, William D. Bygrave and Natalie T. Taylor (1993), ‘The CEO, Venture Capitalists, and the Board’
4. Harry J. Sapienza and Anil K. Gupta (1994), ‘Impact of Agency Risks and Task Uncertainty on Venture Capitalist-CEO Interaction’
5. Josh Lerner (1995), ‘Venture Capitalists and the Oversight of Private Firms’
6. R.C. Sweeting and C.F. Wong (1997), ‘A UK “Hands-off” Venture Capital Firm and the Handling of Post-investment Investor-Investee Relationships’
PART II POST-INVESTMENT INVOLVEMENT: ADDING VALUE
7. Luis R. Gomez-Mejia, David B. Balkin and Theresa M. Welbourne (1990), ‘Influence of Venture Capitalists on High Tech Management’
8. Sanford B. Ehrlich, Alex F. De Noble, Tracy Moore and Richard R. Weaver (1994), ‘After the Cash Arrives: A Comparative Study of Venture Capital and Private Investor Involvement in Entrepreneurial Firms’
9. Harry J. Sapienza, Sophie Manigart and Wim Vermeir (1996), ‘Venture Capitalist Governance and Value Added in Four Countries’
10. Sharon Gifford (1997), ‘Limited Attention and the Role of the Venture Capitalist’
PART III POST-INVESTMENT INVOLVEMENT: INTERVENTION AND PROBLEM CASES
11. John C. Ruhnka, Howard D. Feldman and Thomas J. Dean (1992), ‘The “Living Dead” Phenomenon in Venture Capital Investments’
12. James O. Fiet, Lowell W. Busenitz, Douglas D. Moesel and Jay B. Barney (1997), ‘Complementary Theoretical Perspectives on the Dismissal of New Venture Team Members’
13. Garry Bruton, Vance Fried and Robert D. Hisrich (1997), ‘Venture Capitalist and CEO Dismissal’
14. Andrew L. Zacharakis, G. Dale Meyer and Julio DeCastro (1999), ‘Differing Perceptions of New Venture Failure: A Matched Exploratory Study of Venture Capitalists and Entrepreneurs’
PART IV INVESTOR-ENTREPRENEUR INTERACTIONS: RELATIONAL PERSPECTIVES
15. Harry J. Sapienza and M. Audrey Korsgaard (1996), ‘Procedural Justice in Entrepreneur-Investor Relations’
16. Daniel M. Cable and Scott Shane (1997), ‘A Prisoner’s Dilemma Approach to Entrepreneur-Venture Capitalist Relationships’
17. Lowell W. Busenitz, Douglas D. Moesel, James O. Fiet and Jay B. Barney (1997), ‘The Framing of Perceptions of Fairness in the Relationship Between Venture Capitalists and New Venture Teams’
PART V HARVESTING AND EXITS
18. William L. Megginson and Kathleen A. Weiss (1991), ‘Venture Capitalist Certification in Initial Public Offerings’
19. Linda A. Cyr, Diane E. Johnson and Theresa M. Welbourne (2000), ‘Human Resources in Initial Public Offering Firms: Do Venture Capitalists Make a Difference?’
20. Alon Brav and Paul A. Gompers (1997), ‘Myth or Reality? The Long-Run Underperformance of Initial Public Offerings: Evidence from Venture and Nonventure Capital-Backed Companies’
21. Joshua Lerner (1994), ‘Venture Capitalists and the Decision to go Public’
22. Paul A. Gompers (1996), ‘Grandstanding in the Venture Capital Industry’
23. Mike Wright, Ken Robbie, Yves Romanet, Steve Thompson, Robert Joachimsson, Johan Bruining and Artur Herst (1993), ‘Harvesting and the Longevity of Management Buy-outs and Buy-ins: A Four-Country Study’
24. Mike Wright, Ken Robbie, Steve Thompson and Ken Starkey (1994), ‘Longevity and the Life-Cycle of Management Buy-Outs’
25. J. William Petty, William D. Bygrave and Joel M. Shulman (1994), ‘Harvesting the Entrepreneurial Venture: A Time for Creating Value’
26. Mike Wright, Ken Robbie and Christine Ennew (1997), ‘Venture Capitalists and Serial Entrepreneurs’
Name Index
Volume I
Acknowledgements
Introduction Mike Wright, Harry J. Sapienza and Lowell W. Busenitz
PART I SYSTEMIC ISSUES: EARLY VIEWS
1. Tyzoon T. Tyebjee and Albert V. Bruno (1984), ‘A Model of Venture Capitalist Investment Activity’
2. Jeffry A. Timmons and William D. Bygrave (1986), ‘Venture Capital’s Role in Financing Innovation for Economic Growth’
3. Michael Gorman and William A. Sahlman (1989), ‘What Do Venture Capitalists Do?’
PART II SYSTEMIC ISSUES: MACRO-PERSPECTIVES OF THE 1990s
4. Sophie Manigart (1994), ‘The Founding Rate of Venture Capital Firms in Three European Countries (1970–1990)’
5. Gordon C. Murray (1995), ‘Evolution and Change: An Analysis of the First Decade of the UK Venture Capital Industry’
6. Raphael Amit, James Brander and Christoph Zott (1998), ‘Why Do Venture Capital Firms Exist? Theory and Canadian Evidence’
7. Bernard S. Black and Ronald J. Gilson (1998), ‘Venture Capital and the Structure of Capital Markets: Banks Versus Stock Markets’
8. Leslie A. Jeng and Philippe C. Wells (2000), ‘The Determinants of Venture Capital Funding: Evidence Across Countries’
PART III POLICY ISSUES AND TECHNOLOGY-BASED VENTURES
9. Juan B. Roure and Robert H. Keeley (1990), ‘Predictors of Success in New Technology Based Ventures’
10. Gordon C. Murray (1998), ‘A Policy Response to Regional Disparities in the Supply of Risk Capital to New Technology-based Firms in the European Union: The European Seed Capital Fund Scheme’
11. Urs von Burg and Martin Kenney (2000), ‘Venture Capital and the Birth of the Local Area Networking Industry’
12. Samuel Kortum and Josh Lerner (2000), ‘Assessing the Contribution of Venture Capital to Innovation’
PART IV FUNDS PROVIDERS
13. William A. Sahlman (1990), ‘The Structure and Governance of Venture-Capital Organizations’
14. Kevin N. McNally (1994), ‘Sources of Finance for UK Venture Capital Funds: The Role of Corporate Investors’
15. Paul Gompers and Josh Lerner (1996), ‘The Use of Covenants: An Empirical Analysis of Venture Partnership Agreements’
16. Ken Robbie, Mike Wright and Brian Chiplin (1997), ‘The Monitoring of Venture Capital Firms’
17. Edgar Norton and Bernard H. Tenenbaum (1993), ‘Specialization versus Diversification as a Venture Capital Investment Strategy’
Name Index
Volume II
Acknowledgements
An introduction by the editors to all three volumes appears in Volume I
PART I DEAL GENERATION, SCREENING AND ASSESSMENT
1. Ian C. MacMillan, Robin Siegel and P.N. Subba Narasimha (1985), ‘Criteria Used by Venture Capitalists to Evaluate New Venture Proposals’
2. Raphael Amit, Lawrence Glosten and Eitan Muller (1990), ‘Entrepreneurial Ability, Venture Investments, and Risk Sharing’
3. Michael G. Harvey and Robert F. Lusch (1995), ‘Expanding the Nature and Scope of Due Diligence’
4. James O. Fiet (1995), ‘Reliance upon Informants in the Venture Capital Industry’
5. Dan Muzyka, Sue Birley and Benoit Leleux (1996), ‘Trade-offs in the Investment Decisions of European Venture Capitalists’
6. Geoffrey H. Smart (1999), ‘Management Assessment Methods in Venture Capital: An Empirical Analysis of Human Capital Valuation’
7. Dean A. Shepherd (1999), ‘Venture Capitalists’ Assessment of New Venture Survival’
8. Andrew L. Zacharakis and Dean A. Shepherd (2001), ‘The Nature of Information and Overconfidence on Venture Capitalists’ Decision Making’
PART II VALUATION AND STRUCTURING
9. William D. Bygrave (1988), ‘The Structure of the Investment Networks of Venture Capital Firms’
10. Lloyd Steier and Royston Greenwood (1995), ‘Venture Capitalist Relationships in the Deal Structuring and Post-Investment Stages of New Firm Creation’
11. Sophie Manigart, Koen De Waele, Mike Wright, Ken Robbie, Philippe Desbrières, Harry Sapienza and Amy Beekman (2000), ‘Venture Capitalists, Investment Appraisal and Accounting Information: A Comparative Study of the USA, UK, France, Belgium and Holland’
PART III FINANCIAL CONTRACTING
12. Anat R. Admati and Paul Pfleiderer (1994), ‘Robust Financial Contracting and the Role of Venture Capitalists’
13. Thomas Hellmann (1998), ‘The Allocation of Control Rights in Venture Capital Contracts’
14. Andrei A. Kirilenko (2001), ‘Valuation and Control in Venture Finance’
PART IV STRATEGIES OF VENTURE CAPITAL FIRMS
15. Anil K. Gupta and Harry J. Sapienza (1992), ‘Determinants of Venture Capital Firms’ Preferences Regarding the Industry Diversity and Geographic Scope of their Investments’
16. Richard B. Carter and Howard E. Van Auken (1994), ‘Venture Capital Firms’ Preferences for Projects in Particular Stages of Development’
17. James O. Fiet (1995), ‘Risk Avoidance Strategies in Venture Capital Markets’
18. Dirk De Clercq, Philip K. Goulet, Mikko Kumpulainen and Manu Mäkelä (2001), ‘Portfolio Investment Strategies in the Finnish Venture Capital Industry: A Longitudinal Study’
PART V SUCCESS FACTORS, RETURNS AND PERFORMANCE
19. William A. Sahlman and Howard H. Stevenson (1985), ‘Capital Market Myopia’
20. David J. Brophy and Mark W. Guthner (1988), ‘Publicly Traded Venture Capital Funds: Implications for Institutional “Fund of Funds” Investors’
21. Paul Gompers and Josh Lerner (2000), ‘Money Chasing Deals? The Impact of Fund Inflows on Private Equity Valuations’
22. Thomas Hellmann and Manju Puri (2000), ‘The Interaction Between Product Market and Financing Strategy: The Role of Venture Capital’
Name Index
Volume III
Acknowledgements
An introduction by the editors to all three volumes appears in Volume I
PART I POST-INVESTMENT INVOLVEMENT: MONITORING AND PROTECTING VALUE
1. Joseph Rosenstein (1988), ‘The Board and Strategy: Venture Capital and High Technology’
2. Ian C. MacMillan, David M. Kulow and Roubina Khoylian (1989), ‘Venture Capitalists’ Involvement in their Investments: Extent and Performance’
3. Joseph Rosenstein, Albert V. Bruno, William D. Bygrave and Natalie T. Taylor (1993), ‘The CEO, Venture Capitalists, and the Board’
4. Harry J. Sapienza and Anil K. Gupta (1994), ‘Impact of Agency Risks and Task Uncertainty on Venture Capitalist-CEO Interaction’
5. Josh Lerner (1995), ‘Venture Capitalists and the Oversight of Private Firms’
6. R.C. Sweeting and C.F. Wong (1997), ‘A UK “Hands-off” Venture Capital Firm and the Handling of Post-investment Investor-Investee Relationships’
PART II POST-INVESTMENT INVOLVEMENT: ADDING VALUE
7. Luis R. Gomez-Mejia, David B. Balkin and Theresa M. Welbourne (1990), ‘Influence of Venture Capitalists on High Tech Management’
8. Sanford B. Ehrlich, Alex F. De Noble, Tracy Moore and Richard R. Weaver (1994), ‘After the Cash Arrives: A Comparative Study of Venture Capital and Private Investor Involvement in Entrepreneurial Firms’
9. Harry J. Sapienza, Sophie Manigart and Wim Vermeir (1996), ‘Venture Capitalist Governance and Value Added in Four Countries’
10. Sharon Gifford (1997), ‘Limited Attention and the Role of the Venture Capitalist’
PART III POST-INVESTMENT INVOLVEMENT: INTERVENTION AND PROBLEM CASES
11. John C. Ruhnka, Howard D. Feldman and Thomas J. Dean (1992), ‘The “Living Dead” Phenomenon in Venture Capital Investments’
12. James O. Fiet, Lowell W. Busenitz, Douglas D. Moesel and Jay B. Barney (1997), ‘Complementary Theoretical Perspectives on the Dismissal of New Venture Team Members’
13. Garry Bruton, Vance Fried and Robert D. Hisrich (1997), ‘Venture Capitalist and CEO Dismissal’
14. Andrew L. Zacharakis, G. Dale Meyer and Julio DeCastro (1999), ‘Differing Perceptions of New Venture Failure: A Matched Exploratory Study of Venture Capitalists and Entrepreneurs’
PART IV INVESTOR-ENTREPRENEUR INTERACTIONS: RELATIONAL PERSPECTIVES
15. Harry J. Sapienza and M. Audrey Korsgaard (1996), ‘Procedural Justice in Entrepreneur-Investor Relations’
16. Daniel M. Cable and Scott Shane (1997), ‘A Prisoner’s Dilemma Approach to Entrepreneur-Venture Capitalist Relationships’
17. Lowell W. Busenitz, Douglas D. Moesel, James O. Fiet and Jay B. Barney (1997), ‘The Framing of Perceptions of Fairness in the Relationship Between Venture Capitalists and New Venture Teams’
PART V HARVESTING AND EXITS
18. William L. Megginson and Kathleen A. Weiss (1991), ‘Venture Capitalist Certification in Initial Public Offerings’
19. Linda A. Cyr, Diane E. Johnson and Theresa M. Welbourne (2000), ‘Human Resources in Initial Public Offering Firms: Do Venture Capitalists Make a Difference?’
20. Alon Brav and Paul A. Gompers (1997), ‘Myth or Reality? The Long-Run Underperformance of Initial Public Offerings: Evidence from Venture and Nonventure Capital-Backed Companies’
21. Joshua Lerner (1994), ‘Venture Capitalists and the Decision to go Public’
22. Paul A. Gompers (1996), ‘Grandstanding in the Venture Capital Industry’
23. Mike Wright, Ken Robbie, Yves Romanet, Steve Thompson, Robert Joachimsson, Johan Bruining and Artur Herst (1993), ‘Harvesting and the Longevity of Management Buy-outs and Buy-ins: A Four-Country Study’
24. Mike Wright, Ken Robbie, Steve Thompson and Ken Starkey (1994), ‘Longevity and the Life-Cycle of Management Buy-Outs’
25. J. William Petty, William D. Bygrave and Joel M. Shulman (1994), ‘Harvesting the Entrepreneurial Venture: A Time for Creating Value’
26. Mike Wright, Ken Robbie and Christine Ennew (1997), ‘Venture Capitalists and Serial Entrepreneurs’
Name Index
