Summary of Recent Venture Capital Research
While the stuff is sometimes unintentionally hilarious, there is a burgeoning academic industry in venture capital research -- and it's now and then worth a scan. The following papers have all recently appeared in academic journals (even if some of them have been floating around as working papers for considerably longer):- The size of venture capital and private equity fund portfolios. The gist: There is an optimal size of a VC's portfolio, and the answer is ... it depends.
- Crowding out private equity: Canadian evidence. The gist: Tax advantaged private equity funds have crowded out more orthodox funds from the Canadian market, with the result being less available venture capital.
- IPOs, acquisitions, and the use of convertible securities in venture capital. The gist: VCs aren't just being pricks when they use convertible preferred shares in company financings -- they're being smart, wealth-maximizing pricks.
- What you are is what you like -- Similarity biases in venture capitalists' evaluations of startup teams. The gist: VCs like to invest in people who remind them of themselves.
- How venture capitalists respond to unmet expectations: The role of social environment. The gist: Inexperienced VCs panic at the first sign of a problem in portfolio companies, while more experienced VCs try to work it out -- and then they panic.
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