The role of venture capital in the emerging entrepreneurial finance ecosystem: future threats and opportunities

The last decade has seen the emergence of alternative sources of early-stage finance, which are radically changing and reshaping the start-up eco-system. These include incubators, accelerators, science and technology parks, university-affiliated seed funds, corporate seed funds, business angels \u2013 including \u201csuper-angels\u201d, angel groups, business angel networks and angel investment funds \u2013 and both equity- and debt-based crowdfunding platforms. In parallel with this development, large financial institutions that have traditionally invested in late-stage and mature companies, have increasingly diversified their investment portfolios to \u201cget into the venture game\u201d, in some cases, through the traditional closed-end funds model and, in other cases through direct investments and coinvestments alongside the closed-end funds. This paper reviews the main features, investment policies and risk-return profiles of the institutional and informal investors operating in the very early stage of the life cycle of entrepreneurial firms. It concludes that traditional closed-end venture capital funds continue to play an important role in early stage finance because of their unique competences (e.g. screening, negotiating and monitoring) in what has become a wider and more complex financing ecosystem

Emerging trends in entrepreneurial finance

The emergence of new sources of financing in the aftermath of the financial crisis has substantially increased the funding options available to new entrepreneurial ventures. Technology parks, startup incubators and accelerators, business angels and angel investment organizations, equity crowdfunding platforms, venture capital funds, corporate seed funds and institutional investors directly investing in new ventures, have significantly increased the menu of funding channels, in many cases by leveraging the disrupting effects of Fintech companies and the emergence of internet-based segments of the capital market. As a consequence, a new financing eco-system for new ventures has emerged in recent years that has significant implications for both investors and entrepreneurs, impacting on entrepreneurial growth paths and creating new policy challenges at both the national and global scales. The substantially larger set of funding channels has not only been instrumental in the unprecedented growth in the number of early stage companies but has also raised new questions that have challenged scholars and practitioners and policymakers alike. Idiosyncratic risk-return profiles and investment philosophies, unorthodox investment practices, innovative value-adding contributions to portfolio companies ventures and structurally different exit options are some of the areas that require urgent investigation. The first \u201cEmerging Trends in Entrepreneurial Finance\u201d Conference, 1\u20132 June 2017 organized by the Stevens School of Business, the University of Piemonte Orientale and the Editors of Venture Capital: an International Journal of Entrepreneurial Finance at the Stevens Institute of Technology (Hoboken, NJ, USA) with the sponsorship of Hanlon Financial Systems Center and the Stevens Venture Center, aimed at gathering world-class scholars in the field of entrepreneurial finance to stimulate a debate on the evolution of the financing ecosystem for new ventures. From the close to 75 submissions, of which 16 were accepted for presentation. the Guest Editors of this special Issue have selected six outstanding papers that address crucial topics and recent developments

Exact Flow Equations and the U(1)-Problem

The effective action of a SU(N)-gauge theory coupled to fermions is evaluated at a large infrared cut-off scale k within the path integral approach. The gauge field measure includes topologically non-trivial configurations (instantons). Due to the explicit infrared regularisation there are no gauge field zero modes. The Dirac operator of instanton configurations shows a zero mode even after the infrared regularisation, which leads to U_A(1)-violating terms in the effective action. These terms are calculated in the limit of large scales k.Comment: 22 pages, latex, no figures, with stylistic changes and some arguments streamlined, typos corrected, References added, to appear in Phys. Rev.

Effective Average Action in N=1 Super-Yang-Mills Theory

For N=1 Super-Yang-Mills theory we generalize the effective average action Gamma_k in a manifest supersymmetric way using the superspace formalism. The exact evolution equation for Gamma_k is derived and, introducing as an application a simple truncation, the standard one-loop beta-function of N=1 SYM theory is obtained.Comment: 17 pages, LaTeX, some remarks added, misprints corrected, to appear in Phys. Rev.

Tunneling in quantum cosmology: numerical study of particle creation

We consider a minisuperspace model for a closed universe with small and positive cosmological constant, filled with a massive scalar field conformally coupled to gravity. In the quantum version of this model, the universe may undergo a tunneling transition through an effective barrier between regions of small and large scale factor. We solve numerically the minisuperspace Wheeler--De Witt equation with tunneling boundary conditions for the wave function of the universe, and find that tunneling in quantum cosmology is quite different from that in quantum mechanics. Namely, the matter degree of freedom gets excited under the barrier, provided its interaction with the scale factor is not too weak, and makes a strong back reaction onto tunneling. In the semiclassical limit of small values of cosmological constant, the matter energy behind the barrier is close to the height of the barrier: the system ``climbs up'' the barrier, and then evolves classically from its top. These features are even more pronounced for inhomogeneous modes of matter field. Extrapolating to field theory we thus argue that high momentum particles are copiously created in the tunneling process. Nevertheless, we find empirical evidence for the semiclassical-type scaling with the cosmological constant of the wave function under and behind the barrier.Comment: 29 pages, 17 figure

Winding number transitions at finite temperature in the Abelian-Higgs model

Following our earlier investigations we examine the quantum-classical winding number transition in the Abelian-Higgs system. It is demonstrated that the sphaleron transition in this system is of the smooth second order type in the full range of parameter space. Comparison of the action of classical vortices with that of the sphaleron supports our finding.Comment: final version, to appear in J. Phys.

Large N Quantum Time Evolution Beyond Leading Order

For quantum theories with a classical limit (which includes the large N limits of typical field theories), we derive a hierarchy of evolution equations for equal time correlators which systematically incorporate corrections to the limiting classical evolution. Explicit expressions are given for next-to-leading order, and next-to-next-to-leading order time evolution. The large N limit of N-component vector models, and the usual semiclassical limit of point particle quantum mechanics are used as concrete examples. Our formulation directly exploits the appropriate group structure which underlies the construction of suitable coherent states and generates the classical phase space. We discuss the growth of truncation error with time, and argue that truncations of the large-N evolution equations are generically expected to be useful only for times short compared to a ``decoherence'' time which scales like N^{1/2}.Comment: 36 pages, 2 eps figures, latex, uses revtex, epsfig, float

Running coupling in Yang-Mills theory - a flow equation study -

The effective average action of Yang-Mills theory is analyzed in the framework of exact renormalization group flow equations. Employing the background-field method and using a cutoff that is adjusted to the spectral flow, the running of the gauge coupling is obtained on all scales. In four dimensions and for the gauge groups SU(2) and SU(3), the coupling approaches a fixed point in the infrared.Comment: 35 pages, 3 figures, v2: References added, minor improvements, version to appear in PR