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Determinants of Success of German Venture Capital Investments


  • Michael Schefczyk

    (SAP Chair of Entrepreneurship and Innovation Management, Technische Universität Dresden, D-01062, Dresden, Germany)


Based on literature reviews, I formulated 10 hypotheses for a wide range of determinants of success for German venture capital firms (VCFs). I tested and largely confirmed these hypotheses using bivariate correlation analyses and confirmatory multivariate LISREL models on a data set of 103 transactions by 12 German VCFs. The analyses indicate that emphasizing portfolio companies' managers' qualifications, intensifying cooperation between VCFs and portfolio companies, and ensuring a strong (minority) shareholder position of the VCFs coincide with above average success.

Suggested Citation

  • Michael Schefczyk, 2001. "Determinants of Success of German Venture Capital Investments," Interfaces, INFORMS, vol. 31(5), pages 43-61, October.
  • Handle: RePEc:inm:orinte:v:31:y:2001:i:5:p:43-61

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    References listed on IDEAS

    1. Sandberg, William R. & Hofer, Charles W., 1987. "Improving new venture performance: The role of strategy, industry structure, and the entrepreneur," Journal of Business Venturing, Elsevier, vol. 2(1), pages 5-28.
    2. Harry J. Sapienza & Allen C. Amason, 1993. "Effects of Innovativeness and Venture Stage on Venture Capitalist-Entrepreneur Relations," Interfaces, INFORMS, vol. 23(6), pages 38-51, December.
    3. Dubini, Paola, 1989. "Which venture capital backed entrepreneurs have the best chances of succeeding?," Journal of Business Venturing, Elsevier, vol. 4(2), pages 123-132, March.
    4. Macmillan, Ian C. & Zemann, Lauriann & Subbanarasimha, P. N., 1987. "Criteria distinguishing successful from unsuccessful ventures in the venture screening process," Journal of Business Venturing, Elsevier, vol. 2(2), pages 123-137.
    5. Rosenstein, Joseph & Bruno, Albert V. & Bygrave, William D. & Taylor, Natalie T., 1993. "The CEO, venture capitalists, and the board," Journal of Business Venturing, Elsevier, vol. 8(2), pages 99-113, March.
    6. Robert H. Keeley & Juan B. Roure, 1990. "Management, Strategy, and Industry Structure As Influences on the Success of New Firms: A Structural Model," Management Science, INFORMS, vol. 36(10), pages 1256-1267, October.
    7. Ofek, Eli, 1993. "Capital structure and firm response to poor performance: An empirical analysis," Journal of Financial Economics, Elsevier, vol. 34(1), pages 3-30, August.
    8. Rah, Joongdoug & Jung, Kyungjin & Lee, Jinjoo, 1994. "Validation of the venture evaluation model in Korea," Journal of Business Venturing, Elsevier, vol. 9(6), pages 509-524, November.
    9. Cooper, Arnold C. & Gimeno-Gascon, F. Javier & Woo, Carolyn Y., 1994. "Initial human and financial capital as predictors of new venture performance," Journal of Business Venturing, Elsevier, vol. 9(5), pages 371-395, September.
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