Assessing the Economic Value of Venture Capital Contracts PDF Download

Author: Jil Caroline Onimus
Publisher: Springer Science & Business Media
ISBN: 3834966193
Category : Business & Economics
Languages : en
Pages : 163

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Book Description
Dr. Jil Caroline Onimus identifies the baskets of real options embedded in model venture capital contracts as published by the National Venture Capital Association (NVCA) and shows how they can be priced in interaction using Least Squares Monte Carlo simulation.

Author: Didier Cossin
Publisher:
ISBN:
Category :
Languages : en
Pages : 47

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Author: Phillip Ryan
Publisher: The Rosen Publishing Group, Inc
ISBN: 1448867959
Category : Juvenile Nonfiction
Languages : en
Pages : 82

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Book Description
Explanations to the inner workings of one of the least understood, but arguably most important, areas of business finance is offered to readers in this engaging volume: venture capital. Venture capitalists provide necessary investment to seed (or startup) companies, but the startup is only the beginning, there is much more to be explored. These savvy investors help guide young entrepreneurs, who likely have little experience, to turn their businesses into the Googles, Facebooks, and Groupons of the world. This book explains the often-complex methods venture capitalists use to value companies and to get the most return on their investments, or ROI. This book is a must-have for any reader interested in the business world.

Author: Karoline Jung-Senssfelder
Publisher: Springer Science & Business Media
ISBN: 3835091883
Category : Business & Economics
Languages : en
Pages : 301

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Book Description
Karoline Jung-Senssfelder presents the first augmented contracting analysis, focusing on the interaction of both, financial instruments and covenants, in the creation of incentives to the contracting parties. With a focus on the German market, she integrates the findings of her model-based theoretical and survey-based empirical analyses to derive value-adding implications for an incentive-compatible contract design in the German venture capital market.

Author: Joseph McCahery
Publisher: Oxford University Press, USA
ISBN: 9780199270132
Category : Business & Economics
Languages : en
Pages : 512

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Book Description
Venture capitalists are specialized intermediaries that channel capital to firms and professional services to companies that might otherwise be excluded from the corporate debt market and other sources of private finance. Venture capital financing is used to invest mainly in small and medium size firms with good growth and exit potential. Typically, venture capital firms concentrate in industries with a great deal of uncertainty, where the information gaps among entrepreneurs and venturecapitalist are commonplace. Venture capital firms are active in sectors with a high informational opacity and agency costs. These ventures are identified as financially constrained. Start-up firms rely on venture capital as one of their main sources of funding. Recent empirical research has found that the effect of venture capital on the success of these ventures is considerable. The value of venture capital investment is borne out by the figures which show that venture capital backed-firms grow on average twice as fast as those not backed by venture capital firms. The debate on the development of an efficient venture capital market has forced us to consider which financial instruments, legal rules, labour laws, contracts, and other institutional structures are necessary to create a venture capital market. The contributions to this book have offered insights on the structure of venture capital fund financial contracts, the screening, monitoring and staging of potential investments, the importance of partnership and other legal business forms for investors and start-up firms, the funding of innovation, the valuation of investments, and the exit routes for venture capitalists. The essays in this volume, which draw upon international evidence and ideas from financial economics and law, contribute to further research on the relationship between venture capitalists and entrepreneurs. This collection analyses the main legal and contracting structures in the venture capital cycle. Exploring the differences between the US and European venture capital markets, it focuses on diverse organizational and contractual techniques, such as staged finance, convertible securities, board functions and other forms of control, and the role of exit. Theoretical chapters examine the valuation of entrepreneurial firms and the liquidiation preference in convertible securities. Finally, the book assesses the importance of the IPO market for entrepreneurs, investors and venture capitalists alike.

Author: Nadine Ulrich
Publisher: GRIN Verlag
ISBN: 3640423933
Category : Business & Economics
Languages : en
Pages : 73

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Book Description
Master's Thesis from the year 2007 in the subject Business economics - Investment and Finance, grade: 1,3, Technical University of Munich (Lehrstuhl für Entrepreneurial Finance), language: English, abstract: Die Arbeit beschäftigt sich mit dem ökonomischen Einfluss von Venture Capital-finanzierten Unternehmen und betrachtet dabei im Detail drei Bereiche: Wachstum, Beschäftigung und Innovationen. Outline of the work The objective of this paper is the investigation of the economic impact of venture capital-backed companies. Therefore growth, employment and innovation are examined as the three most important spheres of influence. Beyond that, venture capital probably affects further areas of economy that are however not described within the scope of this work. This analysis should clarify the extent and kind of influence of venture-backed enterprises. It is based on various studies about the economic impact of venture capital, covering different research methods and geographic regions all over the world. The structure of the paper is shown in Fig. 1. The first chapter introduces the topic by describing the relevance of the subject and the structure of the work. Thereafter follows a definition of venture capital, a specification of the economic focus and a discussion of methodological issues. The chapters three to five constitute the main part and investigate the above-mentioned spheres, applying a three-staged examination method. The first section describes the respective topic and discusses relevant measures for the analysis. The second section inspects the development of venture capital-backed companies by looking at quantitative and qualitative aspects. The measures identified in the first section are chosen as quantitative indicators. The qualitative research focuses on the strongest influenced areas. The last section of the respective chapter assesses the economic importance of the topic, summarises the findings and determines the role of venture capitalists. C

Author: Douglas J. Cumming
Publisher: Academic Press
ISBN: 0124095968
Category : Business & Economics
Languages : en
Pages : 781

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Book Description
Other books present corporate finance approaches to the venture capital and private equity industry, but many key decisions require an understanding of the ways that law and economics work together. This revised and updated 2e offers broad perspectives and principles not found in other course books, enabling readers to deduce the economic implications of specific contract terms. This approach avoids the common pitfalls of implying that contractual terms apply equally to firms in any industry anywhere in the world. In the 2e, datasets from over 40 countries are used to analyze and consider limited partnership contracts, compensation agreements, and differences in the structure of limited partnership venture capital funds, corporate venture capital funds, and government venture capital funds. There is also an in-depth study of contracts between different types of venture capital funds and entrepreneurial firms, including security design, and detailed cash flow, control and veto rights. The implications of such contracts for value-added effort and for performance are examined with reference to data from an international perspective. With seven new or completely revised chapters covering a range of topics from Fund Size and Diseconomies of Scale to Fundraising and Regulation, this new edition will be essential for financial and legal students and researchers considering international venture capital and private equity. An analysis of the structure and governance features of venture capital contracts In-depth study of contracts between different types of venture capital funds and entrepreneurial firms Presents international datasets from over 40 countries around the world Additional references on a companion website Contains sample contracts, including limited partnership agreements, term sheets, shareholder agreements, and subscription agreements

Author: Junaid Javaid
Publisher: GRIN Verlag
ISBN: 3656748829
Category : Business & Economics
Languages : en
Pages : 43

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Book Description
Project Report from the year 2014 in the subject Business economics - Investment and Finance, grade: B-, University of West London, course: BUSINESS STUDIES WITH FINANCE, language: English, abstract: This dissertation is written on the topic of “Optimisation of Venture Capital Processes": The scope of this dissertation is broad as it will closely signify and analyse all the important factors incorporated within the process of venture capital and would direct the underlying venture backed company towards the way of optimisation It has been observed that venture capital is frequently perceived as a synonym of private equity. According to Bygrave & Timmons (1992), the venture capital process is composed of four different phases (Investment Decision, Contracting, Control & Value Adding and Exit). The investment decision phase is much significant and is also time consuming. In relation to Contracting aspect, it has been assumed the each negiotated contract would be distinctive from each other and it would happen as a result of variation in term of assigning of control right adequate to that specific investment. With respect to Control & Value Adding aspect, It has been ascertained that through their active participation in the governance, aspect would have an opportunity in transfering their resources & competencies to the company in which they have invested. Therefore, major reason behind the significance of exit strategy in the venture capital is that in the earlier phases of development it seems very rare for the company to pay dividends to its shareholders. From the results of Investment Decision cases of all companies that there are three kinds of approaches (NPV, IRR and Real Options) that could be adopted for the purpose of estimating the value of companies’ projects backed by venture capital From the research paper on contracting factor, It has been discovered that important terms (regarding the composition and form of financial claims held by the entrepreneurs and venture capitalists) seemed to depend more on the size of underlying venture capital market size. From the case study on Control & Value Adding, it has been indicated that there is a direct relationship exists among the venture capitalists’ active participation and the performance of entrepreneurial companies. From the Journal on Exit Strategies, it has been observed that IPO is determined as exensively pursued exit strategy. However, trade sale is regarded as second preferred exit strategy. [...]

Author: Daniel Schmidt
Publisher: Anchor Academic Publishing (aap_verlag)
ISBN: 3954896907
Category : Business & Economics
Languages : en
Pages : 54

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Book Description
The study extends the literature on venture capital by examining whether entrepreneur’s choice for an external investor and certain firm characteristics have an impact on venture success or not. The focus is set on the differences in value creation by venture capitalists and business angels for ventures of the high- and low-technology sector. The assessment of a data set including 252 Series A financing rounds by venture capitalist firms, business angels and collaborative investments of both investors conducted between 2005 and 2012 unveils value enhancing aspects for all three financing solutions. Overall, start-ups initially financed by venture capitalist firms perform best with regard to general venture success, whereas start-ups collaboratively supported by venture capitalists and business angels have the highest chances to exit successfully through a trade sale. It becomes further apparent that ventures located in one of the high-technology industries ‘internet’, ‘pharmaceuticals’ and ‘high-tech’, ventures that are longer established in the market and ventures whose Series A financing round was executed more recently indicate an enhanced likelihood of success.

Author: Douglas Cumming
Publisher: John Wiley & Sons
ISBN: 0470599758
Category : Business & Economics
Languages : en
Pages : 604

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Book Description
An essential guide to venture capital Studies have shown that venture capital backed entrepreneurial firms are on average significantly more successful than non-venture capital backed entrepreneurial firms in terms of innovativeness, profitability, and share price performance upon going public. Understanding the various aspects of venture capital is something anyone in any industry should be familiar with. This reliable resource provides a comprehensive view of venture capital by describing the current state of research and best practices in this arena. Issues addressed include sources of capital-such as angel investment, corporate funds, and government funds-financial contracts and monitoring, and the efficiency implications of VC investment, to name a few. Opens with a review of alternative forms of venture capital Highlights the structure of venture capital investments Examines the role venture capitalists play in adding value to their investee firms This informative guide will help you discover the true potential of venture capital.