Networks of venture capital firms in Silicon Valley

Abstract: By comparing the network structure of venture capital (VC) firms in Silicon Valley (California) to that of VC firms in Route 128 (Massachusetts), the present study challenges any market-centred theory of regional development. I show that there are advantages in examining the structure of social networks of cooperation within the venture capital industry to understand the level of development of a region. I support two distinctive propositions regarding the regional advantage of Silicon Valley over other US high-technology regions such as Route 128. First, collaboration among VC firms in Silicon Valley is more pronounced and dense than in Route 128. Second, the number of investments and amount of money invested by VCs in Silicon Valley staying local are much higher than the number of investments and moneys invested locally by Route 128 VC firms. I argue that historical development as well as the particular structure of the social networks in Silicon Valley is precisely what has fostered relatively higher growth and development of the region compared to many other regions of the world

California Dreaming? Cross-Cluster Embeddedness and the Systematic Non-Emergence of the 'Next Silicon Valley'

The importance of social embeddedness in economic activity is now widely accepted. Embeddedness has been shown to be particularly significant in explaining the trajectory of regional development. Nonetheless, most studies of embeddeddness and its impacts have treated each locale as an independent unit. Following recent calls for the study of cross-cluster social interactions, we look at the consistent failure of numerous localities in the United States with high potential to emulate Silicon Valley and achieve sustained success in the ICT industry. The paper contends that the answer lies in high-technology clusters being part of a larger system. Therefore, we must include in our analysis of their social structure the influence of cross-cluster embeddedness of firms and entrepreneurs. These cross-clusters dynamics lead to self-reinforcing social fragmentation in the aspiring clusters and, in time, to the creation of an industrial system in the United States based on stable dominant and subordinate (feeder) clusters. The paper expands theories of industrial clusters, focusing on social capital, networks, and embeddedness arguments, to explain a world with one predominant cluster region. It utilizes a multimethod analysis of the ICT industry centered in Atlanta, Georgia, as an empirical example to elaborate and hone these theoretical arguments.

Political communication of Hungarian parties in social networking platforms

In recent years, social media platforms are said to have a major impact on communication and communication technologies. More specifically, popular social networking platforms are increasingly employed in political context. Thus, this study examines the online performance of activities and approaches for political communication between Hungarian political parties and civilians in social networking platforms, video hosting services, as well as microblogging services. In order to examine these connections, the author conducted a web-based quantitate analysis and a semantic sentiment analysis to calculate the efficiency and sentiment of social media posts created by political parties. According to the research results, Hungarian political parties underutilize the inherent communication potential of social networking platforms, especially on YouTube and Twitter

Innovation, Spillovers and Venture Capital Contracts

Innovative start-ups and venture capitalists are highly clustered: Silicon Valley is probably the best-known example. Clusters differ in the contracts they use, and in how they perform. I explore the link between spillovers, contractual design and performance. I find that more "incomplete" contracts, with fewer contingencies linking entrepreneurs’ rewards to performance benchmarks, become optimal when positive spillovers are large. The contracts enable the innovative entrepreneur and his investor to extract some of the surplus they generate through positive spillovers for new entrants. This provides a new rationale for contractual incompleteness, and may help to explain observed contractual practice in Silicon Valley

Location matters -measuring the efficiency of business social networking

Abstract: This paper contributes to measuring the efficiency of business social networking events and organisations. In particular, we analysed the communication at Swiss House for Advanced Research and Technology (now Consulate of Switzerland/Swissnex Boston; formerly SHARE), an organisation whose mission is to foster collaboration networks between the scientific and entrepreneurial communities of Switzerland and the greater Boston area. The study consists of two parts. In the first part, SHARE's social network growth over more than a year was measured through an analysis of its e-mail traffic. In the second part, growth of social networks of individuals participating in a set of networking events during a collaboration programme over one week was measured through a web survey. Comparing individual social network growth through attendance and individual follow-up at events organised in Boston and San Francisco demonstrated creation of a much denser network in Boston -with an almost even split between academic and industrial participants in Boston, while the majority of participants in the Silicon Valley came from industry. Boston's academic participants acted as information brokers, building bridges between industrial participants from Boston and Switzerland

Strategic Research Connections: Implementing Funding Policy in a Dynamic Network

Since the early phone book experiments that produced the term "six degrees of separation," renewed interest in network theory ranges from sociology and organizational management to economic development and new economic geography. More formal ‘small world’ studies today underline the importance for an agent to navigate a network efficiently to accomplish, say, a successful job search. Fieldwork has produced a wealth of network data and data collection protocols that grow in sophistication continuously. Lagging behind are proactive analytic tools that use this data to locate strategic connections among network agents to leverage better outcomes, such as applied research output. This work employs a network map of collaborations among venture capitalists in Silicon Valley to locate unexploited strategic connections. From the literature, we test several rules suggested as to how network connections might evolve, simple rules in the style of cellular automata and compare connection choice strategies from the static structure alone. One strategy may be especially attractive. A "smart small world" policy robustly achieves two ends: it improves overall output and flattens the informal hierarchy of the network to improve connectivity and increase competition. Since the smart small world strategy does not require any form of dynamic optimization or programming, but relies on the field data directly, it is more accessible to policy-makers and other social sciences. We test the rule on a research network we are still creating for an emerging technology in the pulp and paper industry. The very first initial connection located a divide between European and North American researchers that participating scholars readily recognize as a concern, providing a face validity test of the program

私募股权基金投资网络关系测度实证研究

私募股权基金在联合投资过程中结成了以信任、分享和互利为主要特征的投资网络,本文利用社会网络分析法,从网络密度、捷径距离、网络中心度、结构洞、派系及核心-边缘结构等角度,对私募股权基金联合投资形成的网络结构特征进行测度研究,分析结果表明中国情境下的私募股权基金投资网络是个非凝聚性和地位不均衡的网络,网络地位突出的基金通常拥有较强的网络影响力和联合投资上的合作优势

COOPERATION AND OPPORTUNISM IN VENTURE CAPITAL FINANCED COMPANIES

This study investigates cooperation and opportunism in interdependent relationships and, in particular, the influence of differing managerial time horizons on the collaborative behavior of interdependent parties. Interdependent relationships are a common aspect of business organizations and the attainment of business objectives frequently requires the combined efforts of people in different roles both within and external to the organization. The context for this study is the relationship between venture capital firms and the management of their portfolio companies. This context was selected two reasons. Firstly, venture capital provides money and expertise to help establish new ventures that are critical to the growth and development of the economy. Secondly, the success rate of venture capital investments is equivocal at best. Using survey data collected from CEOs of venture capital financed companies, I find a strong association between perceived alignment and differences in managerial time horizons and cooperative and opportunistic behavior. I also find evidence that perception of negative interdependence mediates the relationship between perceived differences in managerial time horizons and opportunistic behavior