IDEAS home Printed from https://ideas.repec.org/p/sek/iefpro/0401730.html

Gap Analysis of Venture Capital Markets

Author

Listed:
  • Ondrej Ptacek

    (University of Economics, Faculty of Economics)

  • Bozena Kaderabkova

    (University of Economics, Faculty of Economics)

Abstract

Venture capital is one of most important alternative sources of capital for early stage of enterprise development. It is largely acknowledged that there occurs a market gap in European venture capital markets as there are much more companies in search for an investor than that actually obtain investment. Some authors find this an example of a market failure in the access to finance of micro to medium sized enterprises. There are also authors saying that identification of a market gap does not automatically establish a market failure, as the investors balance both risk and potential gain. We found out that at the supply side of venture capital, the market gap is caused by risk aversion and imperfect information on future development or market acceptation of innovative products in some European countries. At the demand side, imperfect information occurs as young entrepreneurs have often limited knowledge in alternative sources of financing or low level of strategic management abilities, which again discourages potential investors.

Suggested Citation

  • Ondrej Ptacek & Bozena Kaderabkova, 2014. "Gap Analysis of Venture Capital Markets," Proceedings of Economics and Finance Conferences 0401730, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:iefpro:0401730
    as

    Download full text from publisher

    File URL: https://iises.net/proceedings/2nd-economics-finance-conference-vienna/table-of-content/detail?cid=4&iid=26&rid=1730
    File Function: First version, 2014
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mike Wright, 1998. "Venture Capital and Private Equity: A Review and Synthesis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(5&6), pages 521-570.
    2. Marek Zinecker & Jaroslava Rajchlová, 2010. "Private equity and venture capitalists' investment criteria in the Czech Republic [Výzkum kritérií hodnocení podnikatelských projektů ze strany společností investujících Private Equity a Venture kapitál v ČR]," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 58(6), pages 641-652.
    3. Mike, Ken Wright Robbie, 1998. "Venture Capital and Private Equity: A Review and Synthesis," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 25(5‐6), pages 521-570, June.
    4. Robert C. Merton & André Perold, 1993. "Theory Of Risk Capital In Financial Firms," Journal of Applied Corporate Finance, Morgan Stanley, vol. 6(3), pages 16-32, September.
    5. Di Carlo, Anastasia & Kelly, Roger, 2010. "Private Equity Market Outlook," EIF Working Paper Series 2010/05, European Investment Fund (EIF).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bozena Kaderabkova & Ondrej Ptacek, 2016. "Recent development in Venture Capital and Private Equity Investment in the Czech Republic," Proceedings of Business and Management Conferences 4407034, International Institute of Social and Economic Sciences.
    2. Cumming, Douglas & Deloof, Marc & Manigart, Sophie & Wright, Mike, 2019. "New directions in entrepreneurial finance," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 252-260.
    3. Carolin Bock & Maximilian Schmidt, 2015. "Should I stay, or should I go? – How fund dynamics influence venture capital exit decisions," Review of Financial Economics, John Wiley & Sons, vol. 27(1), pages 68-82, November.
    4. Patzelt, Holger & zu Knyphausen-Aufseß, Dodo & Fischer, Heiko T., 2009. "Upper echelons and portfolio strategies of venture capital firms," Journal of Business Venturing, Elsevier, vol. 24(6), pages 558-572, November.
    5. M. Meuleman & S. Manigart & A. Lockett & M. Wright, 2006. "Transaction costs, behavioral uncertainty and the formation of interfirm cooperations: Syndication in the UK private equity market," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/359, Ghent University, Faculty of Economics and Business Administration.
    6. Cho, Jaemin & Lee, Jaeho, 2013. "The venture capital certification role in R&D: Evidence from IPO underpricing in Korea," Pacific-Basin Finance Journal, Elsevier, vol. 23(C), pages 83-108.
    7. Jaaskelainen, Mikko & Maula, Markku & Murray, Gordon, 2007. "Profit distribution and compensation structures in publicly and privately funded hybrid venture capital funds," Research Policy, Elsevier, vol. 36(7), pages 913-929, September.
    8. Lohwasser, Todor S., 2020. "Meta-analyzing the relative performance of venture capital-backed firms," Discussion Papers of the Institute for Organisational Economics 4/2020, University of Münster, Institute for Organisational Economics.
    9. Martí, José & Menéndez-Requejo, Susana & Rottke, Olaf M., 2013. "The impact of venture capital on family businesses: Evidence from Spain," Journal of World Business, Elsevier, vol. 48(3), pages 420-430.
    10. Amina Hamdouni, 2011. "Impact de la syndication sur la performance des entreprises financées par capital-investissement et sur la richesse des parties prenantes," Post-Print hal-00650456, HAL.
    11. Bo?ena Kade?ábková & Ond?ej Ptá?ek, 2016. "Barriers of FDI inflow in venture capital and private equity in the Czech Republic," Proceedings of Economics and Finance Conferences 3205873, International Institute of Social and Economic Sciences.
    12. Christian Hopp & Finn Rieder, 2011. "What drives venture capital syndication?," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3089-3102.
    13. Hussinger, Katrin & Grimpe, Christoph, 2007. "Firm Acquisitions and Technology Strategy: Corporate versus Private Equity Investors," ZEW Discussion Papers 07-066, ZEW - Leibniz Centre for European Economic Research.
    14. Aleksanyan, Mark & Hao, Zhiwei & Vagenas-Nanos, Evangelos & Verwijmeren, Patrick, 2021. "Do state visits affect cross-border mergers and acquisitions?," Journal of Corporate Finance, Elsevier, vol. 66(C).
    15. Mike Wright & Judit Karsai & Zbigniew Dudzinski & Jan Morovic, 1999. "Transition and Active Investors: Venture Capital in Hungary, Poland and Slovakia," Post-Communist Economies, Taylor & Francis Journals, vol. 11(1), pages 27-46.
    16. Sharon Katz, 2008. "Earnings Quality and Ownership Structure: The Role of Private Equity Sponsors," NBER Working Papers 14085, National Bureau of Economic Research, Inc.
    17. Lockett, Andy & Wright, Mike, 2001. "The syndication of venture capital investments," Omega, Elsevier, vol. 29(5), pages 375-390, October.
    18. Alperovych, Yan & Hübner, Georges, 2011. "Explaining returns on venture capital backed companies: Evidence from Belgium," Research in International Business and Finance, Elsevier, vol. 25(3), pages 277-295, September.
    19. Lowell W. Busenitz & James O. Fiet & Douglas D. Moesel, 2005. "Signaling in Venture Capitalist—New Venture Team Funding Decisions: Does it Indicate Long–Term Venture Outcomes?," Entrepreneurship Theory and Practice, , vol. 29(1), pages 1-12, January.
    20. Achleitner, Ann-Kristin & Andres, Christian & Betzer, André & Weir, Charlie, 2008. "Economic consequences of private equity investments on the German stock market," CEFS Working Paper Series 2008-05, Technische Universität München (TUM), Center for Entrepreneurial and Financial Studies (CEFS).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sek:iefpro:0401730. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klara Cermakova (email available below). General contact details of provider: https://iises.net/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.