Although the national media has given increased attention to the venture capital process, misconceptions continue to proliferate. One often hears about the incredible capital gains of IPO share prices. This paper refutes the myth that investors demand very high rates of return to compensate for...

This paper attempts to extend the Certification Paradigm--mainly used in the literature as an explanation for IPO underpricings--to provide guidelines to entrepreneurs in their efforts to secure funding for new ventures. After extending the model to cases of pre-venture-capital start-up firms,...

Although the national media has given increased attention to the venture capital process, misconceptions continue to proliferate. One often hears about the incredible capital gains of IPO share prices. This paper refutes the myth that investors demand very high rates of return to compensate for...

Much of the current research regarding the venture capitalist examines samples of venture capital (VC) backed firms rather than the venture capitalist itself. While VC backed firms may represent the most reasonable proxy available for the study of the venture capitalist, consideration of...

This study replicates substantial portions of a study entitled “Criteria Used by Venture Capitalists to Evaluate New Ventures Proposals” by MacMillan, Siegal, and SubbaNarasimha. Results were similar to the earlier work. The differences observed can be attributed to history effects caused by...

Using a nationwide sample of 14,424 new firms, we find that attractive human capital traits at business entry for entrepreneurs include high educational attainment, owners who lie in the middle of—as opposed to the tails of—the age distribution, and family business background. Attractive...

This paper attempts to extend the Certification Paradigm--mainly used in the literature as an explanation for IPO underpricings--to provide guidelines to entrepreneurs in their efforts to secure funding for new ventures. After extending the model to cases of pre-venture-capital start-up firms,...

In this study we analyze the IPO exit behavior of venture capitalists (VCs) in the Neuer Markt, the former market for young growth companies in Germany. We find empirical evidence that VCs were able to time their exit quite successfully in the primary market and to some extent also in the...

This paper studies the consequences of using a debt contract to raise venture capital for an entrepreneurial project in an adverse selection setting with different quality venture capitalists. The paper considers not only the likelihood of success of a one-time project being dependent on the...

Exit rates provide a simple yet practical measure for evaluating and benchmarking the performance of venture capital funds. We create a sample of 138 liquidated U.S. venture capital funds and investigate the outcomes of their 4,549 portfolio companies. We study exit rates, proportions of...