Choosing Between Promising and Crowded Industries: How Does the Venture Capital Industry Fare in Each?
AbstractIncredible profits from Initial Public Offerings have been highly emphasized. This paper refutes these profits as being standard and supports the market’s return to normalcy by stratifying annual and cumulative returns for different industries: Biotechnology; Communications; Computer Related companies; Medical, Health and Life Science industries; Non-High-Technology companies; and Semiconductor and Other Electronics Industries. This paper tests whether an entrepreneur has greater potential for success in continually promising fields or whether one should slug it out in a risky but potentially very rewarding industry. A comparison of success is made between already competitive businesses and those, which are young and growing.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 04-044.
Length: 25 pages
Date of creation: 17 Dec 2004
Date of revision:
Initial public offering; venture capital; annualized and cumulative rates of return; Information Technology; Medical; Health and Life Science; Non-High Technology; Biotechnology; Communications; Computer Industry; Semiconductor and Other Electronics Industries;
Find related papers by JEL classification:
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G3 - Financial Economics - - Corporate Finance and Governance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-02 (All new papers)
- NEP-ENT-2005-01-02 (Entrepreneurship)
- NEP-FIN-2005-01-02 (Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gompers, Paul A., 1996. "Grandstanding in the venture capital industry," Journal of Financial Economics, Elsevier, Elsevier, vol. 42(1), pages 133-156, September.
- Mansfield, Edwin, 1969. "Industrial Research and Development: Characteristics, Costs, and Diffusion of Results," American Economic Review, American Economic Association, vol. 59(2), pages 65-71, May.
- Yochanan Shachmurove, . "An Empirical Investigation of IPO's Annualized Returns in the Last Three Decades," Penn CARESS Working Papers 823ad5f6b6eb3583cc703364e, Penn Economics Department.
- Paul Gompers & Josh Lerner, 1998.
"Conflict of Interest in the Issuance of Public Securities: Evidence from Venture Capital,"
NBER Working Papers
6847, National Bureau of Economic Research, Inc.
- Gompers, Paul & Lerner, Josh, 1999. "Conflict of Interest in the Issuance of Public Securities: Evidence from Venture Capital," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 1-28, April.
- Emanuel Shachmurove & Yochanan Shachmurove, 2004. "Annualized Returns of Ventured-Backed Public Companies Stratified by Decades and by Stages of Financing," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 9(2), pages 109-123, Summer.
- Lerner, Josh, 1995. " Venture Capitalists and the Oversight of Private Firms," Journal of Finance, American Finance Association, American Finance Association, vol. 50(1), pages 301-18, March.
- Mansfield, Edwin, 1983. "Technological Change and Market Structure: An Empirical Study," American Economic Review, American Economic Association, vol. 73(2), pages 205-09, May.
- Mansfield, Edwin, 1986. "The R&D Tax Credit and Other Technology Policy Issues," American Economic Review, American Economic Association, vol. 76(2), pages 190-94, May.
- Yochanan Shachmurove, 2001. "Annualized Returns of Venture-Backed Public Companies Categorized by Stage of Financing: An Empirical Investigation of IPOS in the Last Three Decades," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 6(1), pages 44-58 , Spring.
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