Post by Sapphire Capital on Dec 15, 2008 22:09:42 GMT 4
Security Choice in the German Venture Capital Market
Thomas Hartmann-Wendels
University of Cologne - Department of Banking
Georg Keienburg
University of Cologne
October 10, 2008
Abstract:
This article analyzes 373 venture capital transactions and seeks to determine why investment strategies differ across deals. In the absence of a frequent use of convertible securities, we find that straight equity, typical and atypical silent partnerships and mixes between these securities have been frequently used to finance entrepreneurial companies. Based on the chosen financial securities' upside potential and downside protection characteristics, we provide an explanation for the differing use of those securities. Our results indicate that entrepreneurial company characteristics, risk management and investor experience influence the selection of financial securities.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1282241_code880277.pdf?abstractid=1282241&mirid=3
Thomas Hartmann-Wendels
University of Cologne - Department of Banking
Georg Keienburg
University of Cologne
October 10, 2008
Abstract:
This article analyzes 373 venture capital transactions and seeks to determine why investment strategies differ across deals. In the absence of a frequent use of convertible securities, we find that straight equity, typical and atypical silent partnerships and mixes between these securities have been frequently used to finance entrepreneurial companies. Based on the chosen financial securities' upside potential and downside protection characteristics, we provide an explanation for the differing use of those securities. Our results indicate that entrepreneurial company characteristics, risk management and investor experience influence the selection of financial securities.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1282241_code880277.pdf?abstractid=1282241&mirid=3