Search results for "Social venture"
showing 10 items of 13 documents
Fostering Dynamic Growth in New Ventures through Venture Capital: Conceptualizing Venture Capital Capabilities
2017
There is ample evidence of the influence of venture capital on the creation and growth of new ventures, yet scant attention has been paid to the heterogeneity of venture capitalists and their capacity to contribute to the dynamic growth of new ventures. This paper aims to contribute to the existing literature by exploring the notion that venture capitalists have beneficial effects on the growth of new ventures when they rely on a set of distinctive skills and processes that we associate with venture capital capabilities. We bridge the venture capital and resource-based view research streams to identify the foundational mechanisms of venture capital capabilities. We develop a set of proposit…
Business Sectors Involved in Social Entrepreneurship
2021
The present chapter offers detailed insights about the characteristics at a microeconomic level of four practical examples of social ventures. After providing a robust theoretical framework about the motivations, challenges and aspirations of social entrepreneurs, it is time to put into practice these conceptions through the lens of real social ventures. The literature encourages the use of case studies to connect the theory groundwork, developed in the academy, to real life. As for this call to study, the present chapter thoroughly covers the ideation and consolidation stages of the selected social ventures, which sheds light for inspiration on a context where social entrepreneurship is in…
Local development through social and territorial innovation: an exploratory case study
2017
This investigation aims to examine innovation in a selected successful Portuguese social venture (The Cooperative Terra Chã) and to analyse the extent to which innovative social ventures are able to contributeto local development. Specifically, the paper highlights the activities developed by the social organization in response to the needs of particular (micro) segments of society and illustrates which key factors triggered thesuccess of the examined social initiative. A case study methodology is used to describe the distinctive characteristics and strategies pursued by the managers of the social venture and to establish the links between the opportunities for social innovation and the ter…
Financing Small Businesses: From Venture Capital to Crowdfunding
2017
Abstract Startups and small businesses are facing many challenges in terms of financing their activities. These types of companies do not have the possibility to access capital market or to make IPO or to borrow money from banks like big, mature or well-known companies (who were at their beginnings startups or small businesses). They have to find different sources for financing their ideas/products/services that are in many cases very risky, hazardous or to ambitious. But, fortunately, the financing alternative for these companies have evolved during the last post crisis years. They have possibility to find some investors that are willing to invest in a non-name company by accessing crowdfu…
Venture Capitalists’ Appraisal of Investment Projects: An Empirical European Study
1997
The Investment appraisal and valuation process of venture capitalists includes Information gathering, the assessment of risk and required return, and the choice of a valuation method. This process is empirically studied in the United Kingdom, the Netherlands, Belgium, and France. The Importance of different information sources is equal in the four countries, except that the French venture capitalists Place more emphasis on personal references and the track record of the entrepreneur. The required return is lowest in the Netherlands and Belgium for every development stage of a company, and highest in the UK. The most widely used valuation method in the UK is the multiplication of past or fu…
Staged Venture Capital Contracting with Ratchets and Liquidation Rights
2011
Abstract This paper uses real options analysis to study later round financing in the presence of two standard venture capital contracting provisions: anti-dilution (ratchet) and liquidation preference. We argue that such provisions can preclude financing of a positive NPV venture in the case of a large follow-on financing relative to firm value. Liquidation preference contracting at multiples greater than one is not feasible in the later round if the financing is small relative to firm value. We highlight an interaction effect between the two provisions: increasing the liquidation multiple can help to avoid dilution and the need for the prior venture capitalist to waive ratchet provisions.
Valuing Common and Preferred Shares in Venture Capital Financing
2012
Abstract This article compares five different methodologies to value common and preferred shares with liquidation rights in a single-period setup of venture capital financing: the venture capital (VC) method; discounted cash-flow valuation with the Capital Asset Pricing Model (CAPM); discounted cash-flow valuation with market model in logs; a risk-preference-based approach; and the real options approach. The risk preference and the real option methodologies are the only ones that can properly account for the contingency in preferred stock. With small financings and small multiples the choice of methodology is not critical; however, with stronger preference rights, the VC method, the CAPM, a…
A Model for Estimating Cash Flows in Firms Backed by Venture Capital
2013
Venture Capital only backs firms for a short period of time. When the time to exit arrives, the firm must inevitably be valued in order to obtain a basis for negotiating the exit price. Discounted cash flow is precisely one of the valuation methods that are used most by Small and Medium-sized Enterprises (SMEs).
Venture capitalists, investment appraisal and accounting information: a comparative study of the USA, UK, France, Belgium and Holland
2000
The differences between the information used for the pre-investment valuation and the valuation methods used by venture capital investors in five countries (USA, UK, France, Belgium and Holland) are empirically studied. The analysis is based on postal questionnaire surveys of representative samples of senior venture capitalists in each country. Differences are found, which may be attributed to the dominant corporate governance mechanism or the level of development of the venture capital market. Between-country differences persist even after taking into account between-country differences in the relative importance of investment stages and venture capital types. Apparently similar systems an…
Venture capitalists' decision-making in small equity markets: a case study using participant observation
2004
Despite significant academic research undertaken in the field of venture capital decision-making process, the dimension and maturity of equity market has not yet been considered as an important contextual factor. Aiming at developing an understanding on how venture capitalists (VCs) select early-stage projects in small equity markets, a pilot study using participant observation technique has been conducted in a Portuguese venture capital firm. The findings indicate that the decision-making process and the criteria used by VCs in this market context differ significantly from those used in the developed equity markets. Regarding the decision-making process as a whole, it appears to be more in…