Bender Spatial Proximity in Venture Capital Financing

A Theoretical and Empirical Analysis of Germany
2011
ISBN: 978-3-8349-6172-3
Verlag: Betriebswirtschaftlicher Verlag Gabler
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 358 Seiten, eBook

Reihe: Entrepreneurial and Financial Studies

Marko Bender analyzes the impact of spatial proximity between venture capitalists and new ventures throughout the investment process. He elaborates a comprehensive theoretical framework and empirically validates resulting hypotheses concerning the observed spatial proximity and the impact of spatial proximity on the likelihood of a venture capital investment using a German dataset.

Dr. Marko Bender completed his doctoral thesis at the KfW Endowed Chair in Entrepreneurial Finance of Prof. Dr. Dr. Ann-Kristin Achleitner at the Technische Universität München.

Zielgruppe

Research

Autoren/Hrsg.

Bender, Marko

Inhaltsverzeichnis

1;Acknowledgments;7
2;Table of Contents;9
3;List of Figures;13
4;List of Tables;15
5;List of Abbreviations;17
6;List of Symbols;19
7;1 Introduction;20
7.1;1.1 Problem and Aims of Analysis;20
7.2;1.2 Research Methodology;24
7.3;1.3 Outline of the Thesis;26
8;2 Fundamentals of Venture Capital Financing and Spatial Proximity;29
8.1;2.1 Venture Capital Financing 2.1.1 Definition of Venture Capital;29
8.1.1;2.1.2 Characteristics of Portfolio Companies;32
8.1.2;2.1.3 Characteristics of German Venture Capitalist Types;33
8.1.2.1;2.1.3.1 Private Venture Capitalists;35
8.1.2.2;2.1.3.2 (Quasi-)public Venture Capitalists;36
8.1.3;2.1.4 Venture Capital Investment Process;39
8.1.3.1;2.1.4.1 Deal Origination;40
8.1.3.2;2.1.4.2 Deal Screening;44
8.1.3.3;2.1.4.3 Deal Due Diligence;46
8.1.3.4;2.1.4.4 Deal Structuring;50
8.1.3.5;2.1.4.5 Investment Development;53
8.1.3.6;2.1.4.6 Investment Exit;56
8.2;2.2 Spatial Proximity 2.2.1 Definition of Spatial Proximity;59
8.2.1;2.2.2 Spatial Distribution of Venture Capitalists and Venture Capital Investments;60
8.2.2;2.2.3 First Implications Regarding the Role of Spatial Proximity in Venture Capital Financing;62
8.3;2.3 Overview of Relevant Literature;64
8.4;general studies;65
8.5;observed patterns in spatial prox-imity between venture capitalists and portfolio companies.;66
8.6;impact of spatial proximity on the likelihood of a VC investment.;68
8.7;impact of spatial prox-imity on specific aspects of VC transactions.;69
9;3 Relevant Theories for the Analysis of Spatial Proximity in Venture Capital Financing;79
9.1;3.1 Identification of Relevant Theories;79
9.2;3.2 Theories Relevant to the Venture Capitalist Entrepreneur Dyad 3.2.1 New Institutional Economics as Starting Point;84
9.2.1;3.2.1 New Institutional Economics as Starting Point;84
9.2.1.1;3.2.1.1 Property Rights Theory;86
9.2.1.2;3.2.1.2 Agency Theory;89
9.2.1.3;3.2.1.3 Transaction Cost Theory;106
9.2.2;3.2.2 Further Theories Explaining the Role of Spatial Proximity;112
9.2.2.1;3.2.2.1 Game Theory;112
9.2.2.2;3.2.2.2 Stewardship Theory;120
9.2.2.3;3.2.2.3 Social Exchange Theory;127
9.3;3.3 Theories Relevant beyond the Venture Capitalist Entrepreneur Dyad: Network Approach;134
9.3.1;3.3.1 Theoretical Foundations;135
9.3.2;3.3.1.1 Approach of Inter-Organizational Networks;137
9.3.3;3.3.1.2 Formal Network Analysis;140
9.3.4;3.3.2 Relevant Networks;142
9.3.5;3.3.3 Implications of Spatial Proximity between Actors;148
9.4;3.4 Summary;149
10;4 Impact of Spatial Proximity throughout the Venture Capital Investment Process;151
10.1;4.1 Pre-Contractual Activities;153
10.1.1;4.1.1 Deal Origination;153
10.1.2;4.1.2 Deal Screening;159
10.1.3;4.1.3 Deal Due Diligence;163
10.1.4;4.1.4 Deal Structuring;171
10.2;4.2 Post-Contractual Activities;172
10.2.1;4.2.1 Investment Development ;172
10.2.1.1;4.2.1.1 Monitoring;172
10.2.1.2;4.2.1.2 Support;177
10.2.2;4.2.2 Investment Exit;186
10.3;4.3 Summary and Testable Hypotheses;192
10.3.1;4.3.1 General Impact of Distance;193
10.3.2;4.3.2 New Venture Characteristics;196
10.3.3;4.3.3 Venture Capitalist Characteristics;199
10.3.4;4.3.4 Investment Round Characteristics;203
11;5 Empirical Analysis of Relationships between Spatial Proximity and the Type and Likelihood of Venture Capital Financing;205
11.1;5.1 Description of Dataset ;206
11.1.1;5.1.1 Available Datasets for Analysis;206
11.1.2;5.1.2 Used Dataset;207
11.1.3;5.1.3 Measurement and Definition of Variables ;213
11.1.3.1;5.1.3.1 Spatial Proximity;213
11.1.3.2;5.1.3.2 New Venture Characteristics;214
11.1.3.3;5.1.3.3 Venture Capitalist Characteristics;217
11.1.3.4;5.1.3.4 Investment Round Characteristics;220
11.1.3.5;5.1.3.5 Control Variables;222
11.1.4;5.1.4 Summary Statistics;224
11.1.5;5.1.5 Possible Selection Biases;226
11.2;5.2 Patterns in Spatial Proximity between Venture Capitalists and Investees;232
11.2.1;5.2.1 Empirical Strategy to Investigate Patterns in Spatial Proximity;232
11.2.2;5.2.2 First Bivariate Analyses;235
11.2.3;5.2.3 Ordered Logistic Regressions;240
11.2.4;5.2.4 Robustness Tests of Conducted Analyses;253
11.2.5;5.2.5 Limitations of Analyses;254
11.3;5.3 Impact of Spatial Proximity on the Likelihood of a Venture Capital Investment;256
11.3.1;5.3.1 Empirical Strategy to Investigate the Likelihood of a Venture Capital Investment;256
11.3.2;5.3.2 Rare Event Logistic Regressions;263
11.3.3;5.3.3 Robustness Tests of Conducted Analyses;290
11.3.4;5.3.4 Limitations of Analyses;291
11.4;5.4 Summary of Results and Discussion;292
12;6 Conclusion;302
12.1;6.1 Summary of Results;303
12.2;6.2 Implications of the Impact of Spatial Proximity on Venture Capital Financing 6.2.1 Implications for Entrepreneurs;308
12.2.1;6.2.2 Policy Implications;310
12.2.2;6.2.3 Implications for Venture Capitalists;313
12.3;6.3 Further Research and Outlook;314
13;Appendix;316
13.1;Appendix A Definitions from VentureSource;316
13.2;B Appendix – Description of Dataset;318
13.3;C Appendix – Patterns in Spatial Proximity;319
13.4;D Appendix – Likelihood of a Venture Capital Investment;332
14;References;348

Über Autor(innen)

Dr. Marko Bender completed his doctoral thesis at the KfW Endowed Chair in Entrepreneurial Finance of Prof. Dr. Dr. Ann-Kristin Achleitner at the Technische Universität München.