Nothing Ventured - Nothing Gained? Empirical Evidence on Venture Capital Financing in Switzerland

Venture Capital, Entrepreneurship, Syndication

Finance and risk: does finance create risk?

Rajan has earned a well-deserved reputation for having been one of the few to have hypothesized in a famous paper presented at the 2005 Jackson Hole conference that a disastrous financial crisis could have occurred. The key thesis put forward by Rajan was that the radical changes that had taken place over the previous decades rendered the economic system more fragile in that they induced the financial system to create a high amount of risk. The aim of this paper is to show: i) that Rajan’s thesis is not coherent with the mainstream theory according to which finance does not create risk; ii) that a meaningful theory capable of explaining the meaning of the elements used by Rajan to assert that finance creates risk can be elaborated on the basis of the lesson of Keynes and Schumpeter

Backing the horse or the jockey? Due diligence, agency costs, information and the evaluation of risk by business angel investors

This paper explores the argument that business angel investors are more concerned with managing and minimising agency risk than market risk. Based on data on the due diligence process from a survey of business angels in the UK, the paper concludes that business angels do view entrepreneur characteristics and experience as having the greatest impact on the perceived riskiness of an investment opportunity. Further, they emphasise personal and informal over formal sources of information in the due diligence process, and seek information on both the entrepreneur and the venture in determining valuation. Indeed, the reliance of business angels on short-term and subjective information to value investment opportunities leads to the conclusion that their approach to valuation is not a function of the conventional protocols of financial analysis, but of personal relations and assessment

The Current Characteristics of Entrepreneur among Millennials in The Capital City of Indonesia

Many types of research imply young entrepreneur is different from the other entrepreneur that exist. Recently the millennial generations possess more entrepreneurial potential than the previous generation. Some of the millennials believe that to become an entrepreneur could increase their career level and prosperous future. Interestingly about 50% of financial and technology company founders are the millennials, but it appears that the business world is currently being run by millennials is quite difficult to survive compare with the other that already mature in business. The aim of this paper is to explore the characteristics of entrepreneur among the millennial generations at the capital city in Indonesia. This research has been conducted on a group of 80 millennials in Jakarta as one of the capital and creative cities in Indonesia. The results of this study can be used by millennials who want to become an entrepreneur. Furthermore, this research can be used also as a self-screening to understand their entrepreneurial characteristics, before starting a new business

Are You Experienced or Are You Talented?: When Does Innate Talent versus Experience Explain Entrepreneurial Performance?

We explore whether entrepreneurial performance is due to innate talent or the accumulation of entrepreneurial experience. Using a novel data set with multiple observations of founding attempts per individual, we generate a unique measure of entrepreneurial talent. In contrast to prior findings, the relative importance of experience versus talent changes with the context. When the current market or technology is familiar, experience dominates. However, when the venture context is unfamiliar, talent is more important. Individuals with experience and talent handle both familiar and unfamiliar aspects and may extract more from a given level of experience. The findings advance our understanding of how the drivers of venture performance shift with the broader technological and industry environment and places limits on when experience aids performance.MIT Entrepreneurship CenterStanford University. Stanford Technology Ventures ProgramEwing Marion Kauffman Foundatio

The Market That Wasn't: the Non-emergence of the Online Grocery Category

We examine the non-emergence of a potential new market category. In the late 1990s the entrepreneurial firms that attempted to sell groceries online attracted significant resources, made meaningful technological advancements and generated immense publicity, yet online grocery retail still failed to emerge as a stand-alone market category. Drawing on multiple primary and secondary data sources, we elaborate on existing frameworks of category emergence to investigate how the social construction of a market category offers a partial explanation for category non-emergence. Our explanations are rooted in the instability and contestation of the underlying beliefs, logics, and bases for legitimacy that can typify an emerging market’s focal actors and audiences. Our findings suggest that under such conditions of instability and contestation, if a core identity frame fails to emerge for the category as a whole, then in spite of significant advances in other areas, a new market category may still fail to emerge

ENDING THE MENDING WALL: EXPLORING ENTREPRENEUR – VENTURE CAPITALIST CO-LOCATION IN NEW ITVENTURES

Venture capitalists and the entrepreneurs they fund are observed to be co-located in order to enable both parties to extract value from their respective investments. This co-location may be relaxed in different conditions. In this paper, we explore conditions under which entrepreneurs not co-located with venture capitalists are still funded. Using the mechanisms of legitimacy and efficiency, we show that fashionability of the entrepreneurial venture’s technology or product can lead to venture funding when the entrepreneur and the VC are not co-located. Similarly, entrepreneurs who are co-located with a highly visible business partner or who possess original intellectual property also have higher odds of funding when not co-located with the focal VC. Finally, we show that these effects are heightened during the Internet boom of 1995-2000, characterized by mimetic contagion. The analysis is conducted on a sample of 44,057 new ITbased ventures funded in North America between 1985 and 2006

Correlation between psychological characteristics and entrepreneurial success: a study of Malay women entrepreneurs / Nurwahida Fuad and Abdul Manaf Bohari

Nowadays, with the emphasis on knowledge based economy, entrepreneurs hip is an important factor to attain its competitive and dynamic character. It is the driving force for the achievement of economic development and contributes to personal development. Furthermore, firms owned by women entrepreneurs are become vital contribution for economic development in the world nowadays. Women entrepreneurs play an important role in entrepreneurs hip world especially in Small Medium Enterprise (SME) because women are effectively involved in many entrepreneurs sectors. Meanwhile, psychological characteristics of entrepreneurs also have received particular attention all over the world, specifically the need of achievement and locus of control. Thus, the purpose of this study is to investigate the correlation between psychological characteristics (need for achievement and locus of control) and entrepreneurial success among Malay women entrepreneurs in Malaysia. This study was conducted among 150 Malay women entrepreneurs in Malaysia were listed in USAHANITA s online directory. The finding obtained from this study indicated that there was a significant (2 tailed significant) positive correlation between psychological characteristics and entrepreneurial success. Meanwhile, the results indicated that variable need for achievement contributes high influence toward women entrepreneurial success and for this there were suggestions to establish the high level of variables need for achievement

Entrepreneurial failure and economic crisis: an historical perspective

This chapter analyses the major UK economic crises that have occurred since the speculative bubbles of the seventeenth century. It integrates insights from economic history and business history to analyse both the general economic conditions and the specific business and financial practices that led to these crises. The analysis suggests a significant reinterpretation of the evidence – one that questions economists’ conventional views