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Monitoring Venture Capital Investments through Internal Control Prediction Markets

Author

Listed:
  • Werner, Max

    (Helmut Schmidt University, Hamburg)

  • Vianelli, Andrea

    (K&L Gates LLP)

  • Bodek, Mariusz C.

    (Head and Co-Founder of comdirect Start-up Garage)

Abstract

This paper offers a new perspective on a fundamental issue of venture capital investments, i.e., the so-called black box of involvement that concerns the paucity of relevant information necessary for venture capital managers to evaluate investments properly. Our paper discusses the application of an internal control prediction market as a monitoring instrument for venture capital investments. We therefore gather research literature and law and financial expertise to discuss uncertain business developments, missing data, and principal–agent conflicts. The results of our paper are expected to make significant contributions to the academic discussion, providing a foundation to open the black box of involvement that current venture capital managers face daily.

Suggested Citation

  • Werner, Max & Vianelli, Andrea & Bodek, Mariusz C., 2016. "Monitoring Venture Capital Investments through Internal Control Prediction Markets," Working Paper 165/2016, Helmut Schmidt University, Hamburg.
    • Handle: RePEc:ris:vhsuwp:2016_165
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    More about this item

    Keywords

    Venture Capital; Venture; Capital Investments; Seed Capital; Monitoring; Managing; Black Box;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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