Realities of long-term post investment performance for venture-backed enterprises

This paper constructs a model of long-run performance for SMEs that have received venture capital backing. The model explains performance by financial structure. FAME data are used for estimating performance equations over the period 1989 to 2004 for UK businesses in their post-investment period. The econometrics uses robust techniques, including least absolute error (LAE) and Tukey trimean estimation. It is shown that the key determinants of performance (measured by ROSF) are profit margins and risk, with lesser, but significant, roles played by liquidity and gearing. The sample is used to identify consistently high performers, and chronic low performers. From the latter group, two detailed case studies illustrate how chronic low performance can emerge, in each case caused by failure to achieve technological milestones, and thereby failing, ultimately, to convince investors of potential company worth

Practitioner views on financial reporting for smaller entities

This paper has four purposes. First, to establish the policy background leading to a special financial reporting standard for small firms (FRSSE), aimed at reducing compliance costs. An indirect policy implication of this was that small firms would be stimulated, for example, in terms of start-up rate, performance (including survival rate, and profitability, and growth), and contribution to employment and innovation within the economy. Second, to consider the implications for FRSSE itself on compliance costs, and to ask what forms they may take. Third, to analyse new evidence on adopters and non-adopters of the FRSSE. Fourth, to cast this new evidence into a cost effectiveness framework, to judge whether adopters who engage in upgrading of skills to implement the FRSSE had attained a net benefit as compared to non-adopters. The conclusion, based on this preliminary evidence, is that upgrading of skills to implement the FRSSE has indeed led to a significant net benefit

Co-evolution of Information Systems in Fast-Growing Small Firms

The paper examines the co-evolution of different dimensions of information systems for a sample of fast-growing small firms. The investigation uses primary source longitudinal empirical evidence. The data are taken from a large database on the lifecycle experience of one-hundred-and-fifty new business starts over a four-year period. They were collected by face to face interviews with owner-managers of small entrepreneurial firms. Interviews were conducted using an administered questionnaire that covered the agenda of markets, finance, costs, business strategy, the development of a management information system, human capital, organisation and technical change. This work uses primarily the data on management information systems. The basic approach used is to compare the attributes of the fastest and slowest paced firms, as identified by their growth rates. We then examine the evolution of these firms' management information systems. The measures used to identify changes in systems include: capital investment techniques, such as return on investment, residual income, net present value, internal rate of return and payback period; methods for managing costs, like just-in-time management, activity-based costing, quantitative risk analysis, value analysis, strategic pricing and transfer pricing; and using computer applications for storing information, project appraisal, financial modelling, forecasting and sensitivity analysis. 'Time lines' are graphed to show the points at which various features of information systems are introduced (e.g. data storage, forecasting, sensitivity analysis), and derived techniques (e.g. ROI, ABC) implemented. Firms are dichotomised into highgrowth and low-growth groups. Comparisons are made within firms and across firms in terms of the co-evolution of different aspects of their accounting information systems

Venture capital investor behaviour in the backing of UK high technology firms : financial reporting and the level of investment

This paper is an empirical investigation into the ways in which venture capitalists value (and invest in) high technology firms, focusing on financial reporting, risk disclosure and intangible assets. It is based on questionnaire returns from UK investors in diverse sectors, ranging from biotechnology, through software/ computer services, to communications and medical services. This evidence is used to examine: (a) the usefulness of financial accounts; (b) the implications of technopole investment; (c) the extent of investor control over the investee's AIS; and (d) the role of investor opinion (e.g. on disclosure, due diligence and risk reporting) in determining the level of equity provision

Venture capital and risk in high-technology enterprises

We find UK investors and entrepreneurs are significantly concordant in rankings of investments and key factors for risk but significantly discordant on risk classes. Investors emphasise agency risk (e.g., motivation, empowerment, alignment), and entrepreneurs emphasise business risk (e.g., market opportunities)

Intangible assets and determinants of firm growth in China

This paper reports on field work within Chinese small firms, aimed at acquiring data to measure the impact of intangible a ssets on firm growth. We extend a size - and age - based model to define growth as a function of size, age, entrepreneurship and intangible assets. We use statistical analysis to create measures of entrepreneurship and intangible assets from these data. Intangibles are classified into six categories: human capital; enterp rise culture, intellectual property; technology; reputation; and network. Finally, we estimate models of small firm employment growth using our new measures. For our sample, we find that entrepreneurial attributes have little significant impact on small firm growth; whereas intangible asset attributes have a positive and significant impact on growth, with networking and technological knowledge being of prime importance

Choices of financial reporting regimes and techniques and underlying decision-making processes : a case study analysis of a port authority

This work was funded by the Carnegie Trust for the Universities of Scotland, whose support is gratefully acknowledged here.This paper examines how financial reporting modes are determined within a company, from the perspective of perceived costs and benefits. The modes investigated include financial reporting regimes (e.g. International Financial Reporting Standards, UK Generally Accepted Accounting Principles) and the financial reporting techniques which support them (e.g. valuing intangibles and investments, treatment of development costs). A stated preference approach is adopted and applied to a fieldwork analysis of the functioning of a large port authority, which was a member of a group and prepared both consolidated and subsidiary accounts. The analysis is largely qualitative, exploring in-depth such matters as key factors in making choices, the decision-making processes behind choices, and the staging of decisions, but underpinned by a quantitative basis, using a metric for determining net benefits of financial reporting regimes and techniques. Our analysis aims to improve our understanding of a company's choice processes underlying its financial reporting, including its handling of complexity and uncertainty, and its use of innovations in techniques and organisational forms for decision support.Publisher PDFPeer reviewe

Decision-support and visualising tools for making good accounting decisions

The primary aim of our research is to develop a robust empirical model of the innovative small firm, which is useful for guiding owner-managers in their quest for high performance. The proposed model explains performance by structural variables (e.g. employment, management, directors), intellectual property (e.g. patents filed and granted), and research support (e.g. phased R&D expenditure), within the firm. Our secondary aim is to use this model to develop a new decision support tool, created using visualisation techniques, that helps owner managers, and their accounting advisors, to achieve good returns (e.g. in terms of ROCE). Once estimated, prototyped, tested, and calibrated, this tool should help management accountants to inform the owner managers of entrepreneurial firms in ways of making better decisions within their firms, thereby improving performance. We illustrate our intent with prototype models, tested on provisional ORBIS and FAME datasets, for the world and for the UK

The Effects of Fire Fighting and On-Scene Rehabilitation on Hemostatis

Fire fighting is a dangerous occupation – in part because firefighters are called upon to perform strenuous physical activity in hot, hostile environments. Each year, approximately 100 firefighters lose their lives in the line of duty and tens of thousands are injured. Over the past 15 years, approximately 45% of line of duty deaths have been attributed to heart attacks and another 650-1,000 firefighters suffer non-fatal heart attacks in the line of duty each year. From 1990 to 2004, the total number of fireground injuries has declined, yet during this same period, the number of cases related to the leading cause of injury - overexertion/strain – remained relatively constant. It is well recognized that fire fighting leads to increased cardiovascular and thermal strain. However, the time course of recovery from fire fighting is not well documented, despite the fact that a large percentage of fire fighting fatalities occur after fire fighting activity. Furthermore, on scene rehabilitation (OSR) has been broadly recommended to mitigate the cardiovascular and thermal strain associated with performing strenuous fire fighting activity, yet the efficacy of different rehabilitation interventions has not been documented. Twenty-five firefighters were recruited to participate in a “within-subjects, repeated measures” study designed to describe the acute effects of fire fighting on a broad array of physiological and psychological measures and several key cardiovascular variables. This study provided the first detailed documentation of the time course of recovery during 2½ hours post-fire fighting. Additionally, we compared two OSR strategies (standard and enhanced) to determine their effectiveness.published or submitted for publicationnot peer reviewe

The BTC40 Survey for Quasars at 4.8 < z < 6

The BTC40 Survey for high-redshift quasars is a multicolor search using images obtained with the Big Throughput Camera (BTC) on the CTIO 4-m telescope in V, I, and z filters to search for quasars at redshifts of 4.8 < z < 6. The survey covers 40 sq. deg. in B, V, & I and 36 sq. deg. in z. Limiting magnitudes (3 sigma) reach to V = 24.6, I = 22.9 and z = 22.9. We used the (V-I) vs. (I-z) two-color diagram to select high-redshift quasar candidates from the objects classified as point sources in the imaging data. Follow-up spectroscopy with the AAT and CTIO 4-m telescopes of candidates having I < 21.5 has yielded two quasars with redshifts of z = 4.6 and z = 4.8 as well as four emission line galaxies with z = 0.6. Fainter candidates have been identified down to I = 22 for future spectroscopy on 8-m class telescopes.Comment: 27 pages, 8 figures; Accepted for publication in the Astronomical Journa