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Social venture capital

About: Social venture capital is a research topic. Over the lifetime, 4237 publications have been published within this topic receiving 169425 citations.


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Journal ArticleDOI
TL;DR: The authors describes and analyzes the structure of VC organizations, focusing on the relationship between investors and venture capitalists and between venture-capital firms and the ventures in which they invest, and contrasts VC organizations with large, publicly traded corporations and with leveraged buyout organizations.

2,686 citations

Journal ArticleDOI
TL;DR: In this article, the authors examined whether the presence of venture capitalists, as investors in a firm going public, can certify that the offering price of the issue reflects all available and relevant inside information.
Abstract: This paper provides support for the certification role of venture capitalists in initial public offerings. Consistent with the certification hypothesis, a comparison of venture capital backed IPOs with a control sample of nonventure capital backed IPOs from 1983 through 1987 matched as closely as possible by industry and offering size indicates that venture capital backing results in significantly lower initial returns and gross spreads. In effect, the presence of venture capitalists in the issuing firms serves to lower the total costs of going public and to maximize the net proceeds to the offering firm. In addition, we document that venture capitalists retain a significant portion of their holdings in the firm after the IPO. THE ABILITY OF THIRD-PARTY specialists to certify the value of securities issued by relatively unknown firms in capital markets that are characterized by asymmetric information between corporate insiders and public investors has attracted much academic interest in recent years. Several authors, including James (1990), Blackwell, Marr, and Spivey (1990), and Barry, Muscarella, Peavy, and Vetsuypens (1991) have developed and tested models based at least in part on the formal certification hypothesis presented in Booth and Smith (1986). A related body of work, represented by DeAngelo (1981), Beatty and Ritter (1986), Titman and Trueman (1986), Johnson and Miller (1988), Carter (1990), Simon (1990), and Carter and Manaster (1990) has examined how investment bankers and auditors help resolve the asymmetric information inherent in the initial public offering (IPO) process. In this paper we examine whether the presence of venture capitalists, as investors in a firm going public, can certify that the offering price of the issue reflects all available and relevant inside information. We hypothesize that venture capitalists can perform this function; that it will be an economically

2,490 citations

Book
24 Sep 1999
TL;DR: Gompers and Lerner as discussed by the authors synthesize their path-breaking work by synthesizing their pathbreaking work into a road map for future research in the growing area of venture capital, which is based on original data sets developed through close relationships with institutional investors in VC funds and investment advisors.
Abstract: The venture captial industry in the United States has grown dramatically over the last two decades Annual inflows to venture funds have expanded from virtually zero in the mid-1970s to more than US$9 billion in 1997 Many of the most visible new firms -including Apple Computer, Genentech, Intel, Lotus, Microsoft and Yahoo - have been backed by venture capital funds Yet despite this tremendous growth and its visible success, venture capital remains a mysterious industry Numerous misconceptions persist about the nature and role of venture capitalists Paul Gompers and Josh Lerner's extensive research on venture capital organizations is based largely on original data sets developed through close relationships with institutional investors in venture capital funds and investment advisors "The Venture Capital Cycle" synthesizes their path-breaking work After an historical overview, the book looks at the formation of funds, the investment of the funds in operating companies and the liquidation of these investments The concluding chapter provides a road map for future research in this growing area Three themes run throughout the book The first is that all venture capitalists confront tremendous incentive and information problems The second is that because the various stages of the venture capital processes are related, the entire process is best viewed as a cycle The third is that, unlike most financial markets, the venture capital industry adjusts very slowly to shifts in the supply of capital and the demand for financing

2,201 citations

Journal ArticleDOI
TL;DR: This paper examined the structure of staged VC investments when agency and monitoring costs exist and found that expected agency costs increase as assets become less tangible, growth options increase, and asset specificity rises.
Abstract: This paper examines the structure of staged venture capital investments when agency and monitoring costs exist. Expected agency costs increase as assets become less tangible, growth options increase, and asset specificity rises. Data from a random sample of 794 venture capital-backed firms support the predictions. Venture capitalists concentrate investments in early stage and high technology companies where informational asymmetries are highest. Decreases in industry ratios of tangible assets to total assets, higher market-to-book ratios, and greater R&D intensities lead to more frequent monitoring. Venture capitalists periodically gather information and maintain the option to discontinue funding projects with little probability of going public.

2,175 citations

Journal ArticleDOI
TL;DR: This paper examined the influence of venture capitalists on the professionalization of firms' internal organization and found that there is a "soft" facet to venture capitalists, in terms of supporting companies to build up their human resources within the organization.
Abstract: This paper examines empirical evidence on the impact that venture capitalists can have on the development path of new firms. We use a hand-collected data set on Silicon Valley start-up companies that allows us to "look inside the black box" and analyze the influence of venture capital on the professionalization of firms' internal organization. The evidence suggests that there is a "soft" facet to venture capitalists, in terms of supporting companies to build up their human resources within the organization. Venture capital is also important at the top, in that venture capital backed companies are more likely and faster to bring in outsiders as CEOs. These CEO replacements are often accompanied with the founder departing from the company, suggesting that venture capitalists also exhibit a "hard" facet in terms of exercising control. The paper examines how these various roles are interrelated, and shows how the role of venture capital varies with the state of the company.

1,784 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
202354
2022174
20215
20204
20198
201821