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Venture capitalists in Spain: cluster analysis of criteria used in the screening process

Author

Listed:
  • Ginés Hernández Cánovas

    (Universidad Politécnica de Cartagena)

  • María Camino Ramón Llorens

    (Dpto. Economía Financiera y Contabilidad)

Abstract

This paper uses a survey dataset of 51 Venture Capital Companies to address a segmentation of the venture capital industry. Our paper yields two specific contributions. First, we analyze in a Continental European bank-based system the most important investment criteria identified by previous empirical literature. Second, we show that existing differences in the use of the investment criteria depend on the specific characteristics of the venture capital companies. Therefore, the same business proposal might obtain different decisions depending on the venture company that the entrepreneur approaches. Our paper provides a better insight into the screening process of venture capitalists and the results have clear implications for entrepreneurs and venture capital companies. The knowledge of what investment criteria are most important to venture capitalists might help entrepreneurs to elaborate better proposals, addressing them to the most suitable venture capital company. El presente estudio usa una encuesta postal realizada a 51 entidades de capital riesgo (ECR) con el objetivo de establecer diferentes tipologías de gestores y de empresas en la industria del capital riesgo. Nuestro trabajo realiza dos contribuciones específicas. En primer lugar, analizamos para el modelo bancario de la Europa Continental aquellos criterios de selección de inversiones más importantes identificados en la literatura empírica previa. En segundo lugar, mostramos que las diferencias en el uso de los criterios de selección de inversiones dependen de las características de las ECR. Por tanto, una misma propuesta de negocio podría obtener diferentes respuestas según la ECR que la evalúe. Nuestro trabajo proporciona una mejor comprensión del proceso de selección realizado por los gestores, y los resultados tienen claras implicaciones tanto para los empresarios como para las ECR. Conocer cuáles son los principales criterios de selección de inversiones podría ayudar a los empresarios a elaborar mejores propuestas, y buscar la financiación en ECR más adecuadas.

Suggested Citation

  • Ginés Hernández Cánovas & María Camino Ramón Llorens, 2010. "Venture capitalists in Spain: cluster analysis of criteria used in the screening process," Working Papers. Serie EC 2010-08, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  • Handle: RePEc:ivi:wpasec:2010-08
    as

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    File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2010-08.pdf
    File Function: Fisrt version / Primera version, 2010
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    References listed on IDEAS

    as
    1. Jacint Balaguer Coll, 2009. "The market integration process under different regulatory regimes: evidence from the European car sector," Working Papers. Serie EC 2009-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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    More about this item

    Keywords

    capital riesgo; análisis de conglomerados; toma de decisiones venture capital; cluster analysis; screening criteria; decision-making;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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