Estimating Early Fundraising Performance of Innovations via Graph-based Market Environment Model

Well begun is half done. In the crowdfunding market, the early fundraising performance of the project is a concerned issue for both creators and platforms. However, estimating the early fundraising performance before the project published is very challenging and still under-explored. To that end, in this paper, we present a focused study on this important problem in a market modeling view. Specifically, we propose a Graph-based Market Environment model (GME) for estimating the early fundraising performance of the target project by exploiting the market environment. In addition, we discriminatively model the market competition and market evolution by designing two graph-based neural network architectures and incorporating them into the joint optimization stage. Finally, we conduct extensive experiments on the real-world crowdfunding data collected from Indiegogo.com. The experimental results clearly demonstrate the effectiveness of our proposed model for modeling and estimating the early fundraising performance of the target project

The impact of business accelerators and incubators in the UK

This report explores how incubators and accelerators impact the startups they support, and which types of support drive this impact. It also examines how incubators and accelerators affect the wider business ecosystem. The report: - examines the objectives of UK accelerators and incubators, and the barriers to reaching these objectives - determines which types of support offered by incubators and accelerators (for example provision of workspace, mentoring, funding or training) add the most value to participating startups - presents a “theory of change” explaining how these types of support make their impact - investigates how Local Enterprise partnerships and Growth Hubs interact with or support accelerators and incubators in their region, and how this interaction helps both parties achieve their objective

Competition in financial services

In the financial services sector, the failure of a single institution can have a compounding effect on the sector, and on national and global economies. In particular, there is systemic risk from inter-institution lending, and this effect is more complex in Australia due to the small number of major players. In retail banking in Australia, following a similar practice in most developed countries, if an unsecured creditor is a retail depositor, their deposit is insured by the government. That is, if a retail bank fails, the Federal Government will make the depositors whole. The regulatory system, particularly the prudential regulatory system, is designed to protect depositors’ and borrowers’ interests, and this protects the interest of the government. The effect is that regulatory policy on banking has prioritised stability in consideration of the sovereign risk associated with the risk of retail bank failure. However, this approach also creates a policy dilemma. The dilemma concerns the extent to which the retail banking sector can attain the benefits of the vigorous rivalry from effective and efficient competition, without unduly risking stability and the potential of a devastating call on the public purse. Specifically, in the context of effective and efficient competition, there is limited competitiveness in retail banking in Australia. This is reflected in the static state of market share between the four major banks, and very slow and marginal improvements gains even by strong second tier competitors. Furthermore, the retail banking sector’s capacity for product and service innovation is limited. Although the absence of vigorous rivalry is conducive to stability within the retail banking sector, it is likely to detract from the welfare of retail banking consumers. Furthermore, the level of innovation may not be as high as is feasible and barriers, including prudential regulatory barriers to entry or expansion, mean that the extent of rivalry is unlikely to change without some form of promotion of competition. The paper consequently makes a four-point recommendation for the removal of the ‘four pillars’ policy:  The four major banks are protected by an implicit government guarantee that impacts market operation with little observable benefit to consumers, and may be a source of consumer disutility.  The four pillars policy has prompted increased vertical integration within the sector, particularly in the area of mortgage products.  There are sufficient merger protections provided by Part IV of the Competition and Consumer Act 2010 (Cth).  Competition and contestability arise when there are reasonably low barriers to entry and exit from the sector. It is not clear that low barriers to entry exist in Australia, and evidence to support this view comes from the failure of international banks to gain a significant toehold in the retail banking sector in Australia. One deterrent to entry is the regulatory focus on the four pillars. The authors recognise that this position is at odds with the view of the Financial System Inquiry. However, the rationale in the report of the Inquiry was to prevent mergers, and the current competition law achieves this objective. The paper recommends two specific policies to promote competition in retail banking without the structural intervention that would otherwise be required to improve the intensity of competition in the retail banking sector:  Introduce bank account number portability. This would use ‘know your customer’ and central database systems in a similar form to those that have been used for mobile number portability in Australia for the last decade and a half.  Introduce customer access to data held by banks to allow third parties to compare bank offerings across all banks.  Significantly, these two recommendations are consistent with the productivity proposals issued by the UK Government in July 2015. The research paper also examines crowd equity funding as a disruptive force in the banking sector, and recommends that crowd equity funding be permitted with the following safeguards:  ASIC should take an active role in monitoring crowd equity funding and be willing to sue in case of fraudulent action.  Any intermediary online platform should have a financial services licence with limited duty of care.  There should be a cap for business raisings through crowd equity funding of $2 million in a 12-month period.  Crowd equity funding is a social phenomenon. Through its use of social media, it has attracted people who have previously never been interested in investing in companies. Instead of being feared, this interest should be nurtured through the promotion of investors’ financial education

Empirical Essays on Entrepreneurial Finance

This dissertation contains three chapters, covering analyses on crowdfunding, mutual fund, and entrepreneurial ecosystem. The chapters are connected at a theoretical level by the study of information asymmetries among financial intermediaries and the value added (or lack thereof) that intermediaries provide in different contexts. The first essay on crowdfunding focuses on platform due diligence. Crowdfunding platform due diligence comprises background checks, site visits, credit checks, cross-checks, account monitoring, and third party proof on funding projects. I conjecture that due diligence is associated with the busyness of platform employees and sophistication of platform service indicated by fee structure. Due diligence screens lower quality projects and mitigates information asymmetries between project issuers and funders; it is associated with higher percentage of successful campaigns and larger amount of capital raised on platforms. I test these propositions with platform-level data and find strong supportive evidence. The second essay on mutual fund studies agency problems associated with fund fee structure. Distinguishing between switches, pre-authorized contributions, systematic withdrawal plans, reinvestments, and distributions, I find that different types of flow exhibit distinct characteristics to retail fund flow with respect to fund fees and past performance. I argue that the positive correlation between retail fund inflow and switch-out reflects information asymmetry between incoming investors and current unitholders. I further show that this information asymmetry, attributed to biased purchase advice, is negatively associated with fund performance. A large sample of proprietary Canadian data from 2003 2014 support the findings. The third essay on entrepreneurial ecosystem studies the joint impact of venture capitalist and technology parks on small business development. I argue two alternative routes that lead entrepreneurial start-ups to acquisition outcomes instead of liquidation. On one hand, acquisitions can come about through the control route with external financers such as venture capitalists (VCs). On the other hand, acquisitions can come about through more advice and support provided to the start-up, such as that provided by a technology park. Empirical analyses on a sample of 251 Crunchbase companies in the U.S. strongly support these propositions

Start up ecosystem: Features, processes, and actors.

Successful start-ups can positively contribute to the well-being of countries' economies by creating jobs and new investment opportunities. The success of start-ups strongly depends on the ecosystem in which they are inserted. In this regard, it is important to understand the concept of the start-up ecosystem, in particular from the point of view of researchers and professionals. The desire to deepen the dimensions and components of the ecosystem and to observe more closely the best start-up-friendly ecosystems, then propose a comparison with the Italian context, is derived from evidence indicating that the most successful start-ups are concentrated mainly in certain areas of the world, and this concentration is by no means accidental. In fact, the presence of cities and districts recognized worldwide as real technological hubs appears to be directly connected to the presence of a series of conditions that are extremely favorable to their development. From this reasoning, the concept of "ecosystem," which we defined in the course of the work as a "set of conditions, actors and infrastructures capable of supporting the birth and development of innovative business projects; an absolutely heterogeneous system of elements, which embraces culture, regulatory and fiscal measures, public administration, financiers, businesses, universities and research centers." To better describe the phenomenon of start-up ecosystems and analyze the main components that characterize the latter, especially in relation to the geographical contexts in which they develop, we have chosen to start from a model that presents five essential components of start-up ecosystems: entrepreneurship with a particular focus on the diffusion of start-up companies; business incubators and accelerators; institutions (and in particular universities); and the possibility of accessing technologies as a lever for achieving the main objectives of start-ups. The work presents a qualitative research methodology on different levels of analysis. The process research is aimed at multiple case studies in which we first present a comparison between the start-up ecosystems of Rome and Naples and then conciliate with a first benchmarking with a context considered to be of excellence (despite the limitations it presents in recent times), i.e., that of Silicon Valley. The case studies were enriched by the results of narrative interviews of the main actors of the start-up ecosystem: start-uppers, directors of incubators and start-up accelerators and university professors engaged in the issues of new entrepreneurship

Are public subsidies effective for university spinoffs? Evidence from SBIR awards in the University of California system

This study examines the impact of public subsidies, and specifically, Small Business Innovation Research (SBIR) awards on university spinoff companies. Using unique data for a population of University of California spinoffs, we find pronounced differences between companies commercializing digital technologies (software and hardware), and those that focus on other product spaces. For digital spinoffs, receiving an SBIR award has a negative impact on raising venture capital and no impact on IPOs, exits or first sales. Conversely, for non-digital firms (e.g., biotechnology, energy), receiving an SBIR award has a positive effect on raising venture capital and performance outcomes. We reason that digital technologies are subject to faster cycle times and higher market uncertainty, relative to technological uncertainty. Digital firms may therefore benefit less from subsidies designed to support technology development, and private investors may view the need of digital companies to obtain such subsidies as a negative certification. Our findings inform policy by suggesting that the industrial domain may be an important boundary condition for the effectiveness of SBIR-type subsidies for university spinoffs

Rebuilding the Appalachian Economy From the Ground Up: Towards A Holistic Organizational Framework for Community and Economic Development in Rural Extractive Areas

Central Appalachia specifically and rural extractive areas more generally face some of the most challenging socio-economic realities in North America. Community-based organizations (CBOs) are an important tool for addressing these challenges. As governments intensify efforts to mitigate climate change, and as fossil-fuel industries contract, extracted communities are experiencing economic, cultural, and environmental upheaval. Many leaders call for a “just transition” away from fossil-fuels, which would make local extraction communities whole. However, achieving a truly just transition away from fossil fuels is extraordinarily challenging, and many extracted communities were never whole to begin with. I argue CBOs are the crucial vehicle through which effective community and economic development (CED) outcomes can materialize for distressed rural communities. Yet CBOs do not receive nearly enough funding, policy-focus, or high-level partnership. Technical assistance provided to CBOs is often ineffective, especially in rural settings. Evaluation systems for measuring rural CBO effectiveness are inadequate. My research is primarily geared toward practitioners and aspiring practitioners. Findings, program designs and evaluative structures put forward herein are based on experience with Coalfield Development, a 501(c)3 non-profit organization I founded in southern West Virginia in 2010. Coalfield Development has essentially served as my research field lab. This dissertation provides four sections detailing organizational capabilities which local CBOs can develop and implement towards the goal of a just transition and improved quality of life for their unique rural place. In doing so, support is needed from funders and policy-makers in order to succeed. Much better evaluative systems are needed, as well, which could improve resource allocation decisions in these greatly under-invested communities and could also improve organizational effectiveness. The four capabilities and corresponding sections of this dissertation are: capacity building for rural CBOs incubating and investing in employment social enterprises human development for people facing barriers to employment and community-based real-estate revitalization In this dissertation, I use mixed-methods to draw insights and best-practices from more than a decade of interventions through Coalfield Development including case studies, focus groups, surveys, cost-benefit-analyses, program designs and program evaluations. My research illustrates and articulates the value of all four capabilities, finding them each as essential components for CBOs working in extracted local economies. While this research is based in central Appalachia it is intended to be useful to practitioners, policymakers, funders, local leaders and researchers in other rural fossil-fuel communities throughout the world

Driving venture capital funding efficiencies through data driven models. Why is this important and what are its implications for the startup ecosystem?

This thesis aims to test whether data models can fit the venture capital funding process better, and if they do fit, can they help improve the venture capital funding efficiency? Based on the reported results, venture capitalists can only see returns in 20% of their investments. The thesis argues that it is essential to help venture capital investment as it can help drive economic growth through investments in innovation. The thesis considers four startup scenarios and the related investment factors. The scenarios are a funded artificial intelligence startup seeking follow-on funding, a new startup seeking first funding, the survivability of a sustainability-focused startup, and the importance of patents for exit. Patents are a proxy for innovation in this thesis. Through quantitative analysis using generalized linear models, logit regressions, and t-tests, the thesis can establish that data models can identify the relative significance of funding factors. Once the factor significance is established, it can be deployed in a model. Building the machine learning model has been considered outside the scope of this thesis. A mix of academic and real-world research has been used for the data analysis of this thesis. Accelerators and venture capitalists also used some of the results to improve their own processes. Many of the models have shifted from a prediction to factor significance. This thesis implies that it could help venture capitalists plan for a 10% efficiency improvement. From an academic perspective, this study focuses on the entire life of a startup, from the first funding stage to the exit. It also links the startup ecosystem with economic development. Two additional factors from the study are the regional perspective of funding differences between Asia, Europe, and the US and that this study would include the recent economic sentiment. The impact of the funding slowdown has been measured through a focus on first funding and longitudinal validations of the data decision before the slowdown. Based on the results of the thesis, data models are a credible alternative and show significant correlations between returns and factors. It is advisable for a venture capitalist to consider these

Financing technology transfer

Global policy discussions increasingly focus on innovation and the knowledge economy as a driver of long-term growth. In parallel new forms of innovation processes are emerging, notably open innovation and innovation networks stressing the importance of connections between various stakeholders. Links between universities and the business sector are of particular importance as many inventions come out of universities but have to be further developed to become economically relevant innovations. New financing instruments and attracting private investors to technology transfer (TT) are necessary but difficult as the patterns of risk and information in this “in-between area” is complex: Technology is not basic anymore and it requires large amounts of capital to be scaled up – with uncertain market prospects. This paper addresses new financial instruments for TT, building on European Investment Fund’s experience in this field.Technology Transfer; Financing; Innovation; Commercialisation; Funding gap; Patents; Licensing; Intellectual Property

How digital innovation can generate revenues for arts and cultural organizations: a survey on Uses and Gratifications

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