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The availability of external equity finance is a key factor in the development of technology‐based firms (TBFs). However, although a wide variety of sources are potentially available, many firms encounter difficulties in securing funding. The venture capital community, particularly in the UK, has done little to finance early stage TBFs and has failed to cater adequately for the specific value‐added requirements of these firms. Non‐financial companies have the potential to become an important alternative source of equity finance for TBFs through the process of corporate venture capital (CVC) investment. Based on a telephone survey of 48 UK TBFs that have raised CVC, examines the role of CVC in the context of TBF equity financing. Shows that CVC finance has represented a significant proportion of the total external equity raised by the survey firms and has been particularly important during the early stages of firm development. In addition, CVC often provides investee firms with value‐added benefits, primarily in the form of technical‐ and marketing‐related nurturing and credibility in the marketplace. Concludes with implications for TBFs, large companies, venture capital fund managers and policy makers.

This study aims to examine the venture capital (VC) industry in China. It has demonstrated a history of high growth with significant variations over time. The authors have examined the trends and determinants of VC investments in China over a 20-year period from 1995 to 2014. They find that the aggregate amount of VC investments, the total number of venture deals and the average amount of venture investments per deal in China are all significantly impacted by macroeconomic conditions (i.e. GDP, export, money supply), technology innovations and financial market indicators (i.e. initial public offerings (IPOs), interest rate, price-to-earnings ratio, etc.). They also find that the 2007 China A-Share stock market crash and the subsequent global financial crisis have motivated VCists in China to adjust their investment strategies and risk levels by allocating more capital to later-stage investments and securing more deals with later-round financings. However, after the 2008 global financial crisis, the China’s venture industry has recovered faster compared to the US counterpart response.

The authors first perform trend analysis of VC investments at an aggregate level, by stages of development, and across industry from 1995 to 2014.To test H1 and H2, the authors use multiple regression models with lagged explanatory variables. To test H3, the authors use univariate tests to compare the measures of VC investments at an aggregate level, stage funds ratios, stage deals ratios and financing series ratios during both a five-year and seven-year time windows around the 2007 A-Share stock market crash and the subsequent financial crisis.

The development of the VC industry in China has demonstrated a history of high growth with significant variation over time. The authors find that the aggregate amount of VC investments, the total number of venture deals and the average amount of venture investments per deal in China are all significantly impacted by macroeconomic conditions (i.e. GDP, export, money supply), technology innovations and financial market indicators (i.e. IPOs, interest rate, price-to-earnings ratio, etc.). The authors also find that the 2007 China A-Share stock market crash and the subsequent global financial crisis have motivated VCists in China to adjust their investment strategies and risk by allocating more capital to later-stage investments and securing more deals with later-round financings. However, the China VC industry has recovered faster compared to the USA just after the 2008 global financial crisis.

There are also limitations in the study. The VC data in China in the earlier 1990s might not be very reliable due to the quality of statistics. Therefore, the trend analysis and discussions mainly focus on the time after 2000. Also, the authors cannot find VC financing sequence data for the analysis. Second, there is no doubt that the policy impact from Chinese transforming economic system and government policies on its VC industry is substantial (Su and Wang, 2013). However, they cannot find an appropriate variable to be included in the empirical models to consider this effect. Further study on this area would provide meaningful information. Third, although the authors have done comparison study between the VC industry in China in this study and the VC industry in the US documented in Ning et al. (2015) and discussed some interesting findings, more in-depth research in this area will be very useful.

The findings have meaningful implications for VCists and start-up companies seeking equity financings in China. VCists should closely monitor macroeconomic and market conditions to make appropriate adjustments to their risk and investment strategies. Entrepreneurs seeking equity financings for their business could also monitor the identified macroeconomic and market indicators, which can help them with their timing and to negotiate a better equity financing deal. VC financing is more likely to succeed when key macroeconomic and market indicators become favorable.

This paper contributes to the literature by testing the supply and demand theory on the VC market proposed by Poterba (1989) and Gompers and Lerner (1998) from the macroeconomic perspective using 20 years’ VC data from China. The authors also examine how the 2007 A-Share stock market crash and the subsequent financial crisis affected VCists to adjust their risk levels and investment strategies. It provides useful information for international academia and policymakers to understand the quick rise of China VC industry. The authors also find that the macroeconomic drivers of VC industry are somewhat different under different economic systems.

The purpose of this paper is to empirically demonstrate that drivers of venture capital (VC) investments are different across three broadly defined sectors: high-technology manufacturing, medium-technology manufacturing and services, and low-technology services. Moreover, such differences also exist across industries within each of these sectors.

The basic hypothesis is that “not only different stages of VC investments have different drivers, but VC investments in different sectors of the economy are also driven by different drivers.” The paper tests this hypothesis using a Poterba (1989) type supply and demand framework in the multivariate time-series regression analysis.

This paper empirically demonstrates that drivers of VC investments are different across three broadly defined sectors: high-technology manufacturing, medium-technology manufacturing and services, and low-technology services. Moreover, such differences also exist by stages of investment and across industries within each of these sectors. In particular, the paper finds that the importance of the number of VC-led initial public offering (IPO) transactions as the main driver of VC investment decreases with the level of technology involved in the sector. IPO transactions are particularly important in software, networking and equipment, and business products and services industries. In contrast to earlier literature, however, the paper do not find a more pronounced effect of IPOs for seed and late stages of VC investments. Similarly, the positive impact Sarbanes-Oxley Act of 2002 – which mainly impacts public companies – also intensifies with a decrease in the level of technology involved in the sector, and the paper do not find a negative impact. The Act is important particularly for VC investments in medium- and low-tech sectors and in early or expansion stages.

In analyzing the determinants of VC in a supply and demand framework as in Poterba (1989), the paper differentiates between different sectors (17 industries) and stages of VC (four stages: seed, early, expansion, late). Such level of differentiation is novel and allows more refined and better targeted public policy measures.

The purpose of this paper is to identify the importance assigned to the various criteria used by the Portuguese venture capitalists (VCs) to evaluate and select early stage venture capital (VC) projects.

The data were collected through a questionnaire answered by 20 Portuguese VCs. The authors use descriptive statistics techniques and non-parametric tests to identify the most valued criteria and test differences in the importance assigned to the criteria of several types of VCs and investments.

The study reveals that personality and experience of the entrepreneur and of the management team are the most valued groups of criteria. VCs with a majority of private share capital value more the personality of the entrepreneur and management team than the companies with a majority of public share capital. Additionally, the VCs that did not yet internationalize consider the personality of the entrepreneur and management team and the financial aspects, to be more important than the VCs that have already expanded abroad.

It provides evidence on the VCs behavior in a small VC market. Since most of the existing literature on this area refer to large VC markets, the present study is important to investigate whether the conclusions reached by the previous studies can be extended to a small VC market. Also, this study is a contribution to the literature on the internationalization of VCs and it is the first study that explores the impact of the VCs being internationalized on the value given to the various selection criteria of early stage VC projects.

The purpose of this paper is to explore the role of trust in the unobservable decision-making process of lead investors and follow-on investors in the specific context of equity crowdfunding (ECF) campaigns.

This work employs a case study approach. The author conducts a three-year inductive field study of Chinese ECF – AngelCrunch. The author gathered both campaign and platform-level data from the selected case covering a period of seven years from 2011 to 2018. The data set used for this study includes the characteristics of 189 online campaigns, 25 face-to-face interviews with the platform managers, early-stage investors and entrepreneurs, first-hand observations and quarterly reports on online campaigns supplemented with informal interviews with the authors for the reports.

The findings from this study provide early insights onto the unobservable decision-making process of ECF investors. It demonstrates that lead investors use both selective signalling information and physical interactions with the entrepreneurs to build competence and relational trust on which they rely for making an early pledge. It also shows that follow-on investors differ from lead investors in the process of building trust for decision-making. Furthermore, this work uncovers the role of ECF platforms in facilitating the process of building interpersonal trust for the decision making, with challenges to maintain the notion of platforms in raising a small amount of capital from a large crowd.

This study is constrained by the limited scale of qualitative elements available. The findings of the study have implications for platform managers, investors and policy makers.

Building on entrepreneurial finance and trust theory, this work demonstrates how lead investors build competence and relational trust on which they rely to make an early pledge in the context of ECF. The perception of a lead investor and the commitment together with the selective and formative information by the entrepreneur/s are key in follow-on investors’ decision making. This study uncovers that crowdfunding enables additional and valuable information to be assessed by crowd investors to manage extreme risk and uncertainty occurred in early-stage investments. This work also demonstrates that virtual world has its limitations to build interpersonal trust for managing extreme risk.

Unlike the previous studies that examined the direct relationship between media attention on entrepreneurship (MAE) and entrepreneurship participation, this paper aims to examine the mediated link through entrepreneurial intention.

The cognitive theory of media provides the foundation for predictions that primary outcome of MAE is the entrepreneurial intention which in turn affects the different types of entrepreneurship participation (early-stage startup activities, new product development [NPD] activities and informal investment activities). The test of the hypothesized model relies on panel data for 2010–2015 on 40 developing and developed countries taken from the Global Entrepreneurship Monitor report of 2015.

MAE has an indirect effect on two types of entrepreneurship participation (early-stage startup activities and informal investment activities) via entrepreneurial intention, whereas there is no direct or indirect effect of MAE on NPD activities. The findings also suggest when the entrepreneurial intention is added as a mediator in the model; the direct effect of MAE on early-stage entrepreneurial activities becomes insignificant.

To the best of the authors’ knowledge, this is the first study in its nature which established the relationship between MAE and entrepreneurial intention. In addition, this study also explained the mediation mechanism between the relationship of MAE and entrepreneurship participation by using the panel data.

The early-stage venture capital (VC) industry has long been dominated by small firms comprising senior venture capitalists and few junior staff. However, during the late 1990s, a group of firms changed their internal structures, adopting pyramidal structures and redesigning internal processes to leverage the efforts of junior staff. In doing so, they followed first-movers in other professional services industries that transitioned to pyramidal models in the 20th century. Has the recent industry downturn terminated the transition, or simply delayed it? This chapter analyzes the events that led the VC firms to transition, the barriers to doing so, and related issues affecting the industry's future.

The venture capital and private equity (VCPE) industry in India has grown significantly in recent years. During five‐year period 2004‐2008, the industry growth rate in India was the fastest globally and it rose to occupy the number three slot worldwide in terms of quantum of investments. However, academic research on the Indian VCPE industry has been limited. This paper seeks to fill the gap in research on the recent trends in the Indian VCPE industry.

Studies on the VCPE transactions have traditionally focused on one of the components of the investment lifecycle, i.e. investments, monitoring, or exit. This study is based on analyzing the investment life cycle in its entirety, from the time of investment by the VCPE fund till the time of exit. The analysis was based on a total of 1,912 VCPE transactions involving 1,503 firms during the years 2004‐2008.

Most VCPE investments were in late stage financing and took place many years after the incorporation of the investee firm. The industry was also characterized by the short duration of the investments. The type of exit was well predicted by the type of industry, financing stage, region of investment, and type of VCPE fund.

This paper highlights some of the key areas to ensure sustainable growth of the industry. Early stage funding opportunities should be increased to ensure that there is a strong pipeline of investment opportunities for late stage investors. VCPE investments should be seen as long‐term investments and not as “quick flips”. To achieve this, it is important to have a strong domestic VCPE industry which can stay invested in the portfolio company for a longer term.

This paper considers efficient venture capital investment duration for different types of entrepreneurial firms so that on exit information asymmetries between the venture capitalist (as seller) and the new owners of the investment are minimized, and capital gains maximized. We hypothesize that a number of factors are likely to affect investment duration, and our empirical tests confirm the statistical significance of some of these variables (stage of firm at first investment, capital available to the venture capital industry, whether the exit was preplanned, and whether the exit was made in response to an unsolicited offer). However, the fit between our theoretical model and the data is stronger in the United States than in Canada, offering evidence in support of the view that institutional factors have distorted investment duration in Canada.

There has been considerable debate concerning the contribution of venture capitalists (VCs) to their investee companies (Sapienza, Manigart, & Vermeir, 1996). This research has shown that VCs can add value and impact the strategic direction of their investee firms through their skills and knowledge. These skills lie in two distinct areas: financial (monitoring) and non-financial (strategic and operational involvement) skills (Pruthi, Wright, & Lockett, 2003). The monitoring and involvement of VC firms in their investees have been shown to vary according to their needs (Lerner, 1995). On balance, the evidence suggests greater involvement during the more uncertain earlier stages than during the later stages when the firm is more established (Sapienza, Amason, & Manigart, 1994; Elango, Fried, Hisrich, & Polonchek, 1995). This suggests that the VC's ability to bring about change will be mediated by the impact of the history of the firm via path dependency (Teece, Pisano, & Shuen, 1997).