Liquidity, technological opportunities, and the stage distribution of venture capital investments

This paper explores the determinants of the stage distribution of European venture capital investments from 1990 to 2011. Consistent with liquidity risk theory, we find that the likelihood of investing in earlier stages increases relative to all private equity investments during liquidity crisis years. While liquidity is the main driver of acquisition investments and, to some extent, of expansion financings, technological opportunities are overall the main driver of early and late stage venture capital investments. In contrast to the dotcom crash, the recent financial crisis negatively affected the relative likelihood of expansion investments, but not of early and late stage investments

Employment Contribution of Private Equity and Venture Capital in Europe

Over the past ten years, private equity and venture capital have played an increasingly important role in the European economy. In parallel to the increase in investments, contribution of the private equity and venture capital industry to employment in Europe has grown. Against this background, the European Ventura Capital and Private Equity Association has commissioned the Center for Entrepreneurial and Financial Studies (CEFS) at the Technische Universität München to undertake a research study on the contribution of the private equity and venture capital sector to European employment. 201 private equity and venture capital-backed companies participated in the pan-European survey. The study has found that private equity and venture-backed companies employed between 4.8 and 6.4 million people in Europe in 2004. European private equity and venture capital-financed companies created 1 million jobs between 2000 and 2004. 420,000 new jobs were created in buy-out financed companies and 630,000 new jobs in venture-backed companies within this period. Employment grew in buyout-financed companies by 2.4% and in venture-backed companies by 30.5% on average per year between 1997 and 2004

Country of origin effects and new financial actors: Private Equity investment and work and employment practices of French firms

This is a study of the effects of alternative investors on a range of work and employment practices in France, paying specific attention to whether investors are indigenous or not. We use data from a detailed survey of French firms to explore the impact of PE investments on work and employment practices, and set it in the context of the literature on comparative capitalisms. We find that PE investments from abroad are associated with greater job insecurity, less spending on training, and lower wages, but French PE investments do not. We explore the reasons behind this variation, and the implications for theory and practice

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 pattern 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

Agency, Strategic Entrepreneurship and the Performance of Private Equity-Backed Buyouts.

Closed accessAgency theory has focused on buyouts as a governance and control device to increase profitability, organizational efficiency, and limited attention to growth. A strategic entrepreneurship view of buyouts incorporates upside incentives for value creation associated with growth as well as efficiency gains. In this paper, we develop the complementarity between agency theory and strategic entrepreneurship perspectives to examine the performance implications for different types of buyouts. Further, we study how the involvement of private equity (PE) firms is related to the performance of the post-buyout firm. These issues are examined for a sample of 238 PE-backed buyouts in the UK between 1993 and 2003. Implications for theory and practice are suggested