Attracting Cross-Border Venture Capital

Attracting Cross-Border Venture Capital
Author: Markku V. J. Maula
Publisher:
Total Pages:
Release: 2008
Genre:
ISBN:

Examining an increasingly prevalent but under-researched phenomenon, cross-border venture capital investments, it is observed that local venture capitalists typically invest first, followed by foreign venture capitalists in later rounds. A model is developed that explains the role of a domestic venture capital investor in attracting foreign investors and which also accounts for the impact of various circumstances on the importance of this role. In our model based on analysis of nine cross-border venture capital-backed companies, local venture capitalists have several important roles in increasing the venture's cross-border investment readiness including advice to operational management and contributing contacts and local market knowledge. The importance of these roles is mitigated if the entrepreneurial team is highly experienced or if the home market is not important for the venture. The prominence of the local investor has signalling value. Finally, the local investor's international social capital facilitates the formation of cross-border syndicates. Overall, the model developed in the paper contributes to a better understanding of cross-border venture capital and in particular to the division of labour between domestic and foreign venture capitalists in international venture capital syndicates. The paper also contributes to the emerging literature on international social capital.

Cross-Border Venture Capital Investments

Cross-Border Venture Capital Investments
Author: Horstense Tarrade
Publisher: Springer Science & Business Media
Total Pages: 175
Release: 2012-07-02
Genre: Business & Economics
ISBN: 3834969397

Hortense Tarrade analyses over 200,000 venture capital (VC) investments over the past 20 years to understand the investors' motivation to select national or foreign companies into their portfolio. She compares the sensitivity of US-based, non-US and German VC firms to the availability of local deal supply and demand as well as the relative importance of their intrinsic capabilities in their investment scope decision ("Why do VC firms invest on a national, continental or global scope?"). Further, she provides an in-depth analysis of the role of geographic and cultural distance in investments by German VCs ("Why do VC firms invest in a target location rather than another?").

Managing Culture and Interspace in Cross-border Investments

Managing Culture and Interspace in Cross-border Investments
Author: Martina Fuchs
Publisher: Routledge
Total Pages: 193
Release: 2017-06-27
Genre: Business & Economics
ISBN: 1317399455

This book focuses on the dialectics between spatio-organisational gaps and local contexts that characterise cross-border investments. "Interspatial" investments – be it mergers & acquisitions (M&A) or greenfield investments – are usually characterised by what is referred to as "otherness", i.e. organisational and cultural distances of the firms involved in relation to their regional contexts. At the same time, economic, political and socio-cultural linkages are decisive for attracting cross-border investments to regions and for providing firms with conditions supportive of their market success. As a consequence of being locked into complex structures of proximities, cross-border investments are situated in contested terrain. This terrain triggers learning processes in both regional actors and investors, which can result in the convergence of mindsets and organisational issues. This book is unique in that it combines interspace (defined as the distance between the new owner and the cross-border venture), place (the target region), interpretation (perception and understanding of the investment by the actors involved) and context (institutions, actor networks and interaction), thus offering better understanding of recent processes of globalisation. Crossing disciplinary boundaries by integrating economic geography and management studies, the volume adopts an innovative and spatially informed perspective on foreign direct investments (FDI). This perspective will be of great value to scholars, students and practitioners. The volume is inventive in its approach in that it offers fresh readings from interdisciplinary theoretical approaches and combines these with valuable empirical insights from developed as well as Emerging Economies.

Cross-Border Venture Capital Investments

Cross-Border Venture Capital Investments
Author: Wendy A. Bradley
Publisher:
Total Pages: 22
Release: 2019
Genre:
ISBN:

Cross-border venture capital (VC) investments play an important role in the scaling up of high-growth companies. However, policymakers worry that foreign VC investments transfer the majority of economic activity to the investor country. On the one hand, startups welcome the foreign capital, expertise, and networks that accompany cross-border investments. On the other hand, policymakers are concerned that cross-border investments predominantly benefit foreign economies and fail to develop the local entrepreneurial ecosystem.This paper describes a framework for how policymakers can develop a set of policies toward cross-border VC investments. The paper examines available data and trends about the role of cross-border investing, focusing on Europe, Israel, and Canada. Then, the paper explains the underlying economic challenges and develops a policy framework. The analysis shows that in addition to policies that aim to attract foreign investors, there are also important policies for the development of the domestic VC market. The analysis encompasses policies that are both financial and non-financial in nature. A core insight for policymakers is to retain a balance of initiatives, attracting foreign investors while simultaneously making sure to strengthen the country's domestic VC industry and innovation ecosystem. The mix of policies will adjust as the domestic ecosystem matures.

Fencing Off Silicon Valley

Fencing Off Silicon Valley
Author: Ufuk Akcigit
Publisher:
Total Pages:
Release: 2020
Genre:
ISBN:

The treatment of foreign investors has been a contentious topic in U.S. entrepreneurship policy in recent years. This paper examines foreign corporate investments in Silicon Valley from a theoretical and empirical perspective. We model a setting where such funding may allow U.S. entrepreneurs to pursue technologies that they could not otherwise, but may also lead to spillovers to the overseas firm providing the financing and the nation where it is based. We show that despite the benefits from such inbound investments for U.S. firms, it may be optimal for the U.S. government to raise their costs to deter investments. Using as comprehensive as possible a sample of investments by non-U.S. corporate investors in U.S. start-ups between 1976 and 2015, we find evidence consistent with the presence of knowledge spill-overs to foreign investors.

Interorganizational Commitment in Syndicated Cross-Border Venture Capital Investments

Interorganizational Commitment in Syndicated Cross-Border Venture Capital Investments
Author: Markku V. J. Maula
Publisher:
Total Pages:
Release: 2008
Genre:
ISBN:

Cross-border venture capital has become increasingly common in recent years. Little is known, however, about the antecedents of venture capitalists' commitment to portfolio firms in international settings. We used a multiple case study to build a grounded model of interorganizational commitment in cross-border syndication networks. The model proposes that changes in a venture's prospects influence investors' commitment levels. This relationship is amplified by the remoteness of the investor and is mitigated by the investor's embeddedness in local syndication networks and the relative investment size. The model contributes to the literature on cross-border venture capital and interorganizational commitment in international settings.

Cross-Border Venture Capital and New Venture Internationalization

Cross-Border Venture Capital and New Venture Internationalization
Author: Markku V. J. Maula
Publisher:
Total Pages:
Release: 2008
Genre:
ISBN:

Many of the fastest growing global ventures are backed by cross-border venture capitalists. However, the role of foreign investors in internationalization has not been examined in prior research. To address this gap, we carried out a multiple case study to produce a grounded theory of the effects of foreign investors in new venture internationalization. Our findings suggest that foreign venture capitalists located in a venture's target market of internationalization can be valuable for the venture by legitimizing the unknown new venture in that market. However, foreign investors tend to drive portfolio companies towards their home markets, and the benefits may turn into disadvantages if the target market differs from the home markets of the foreign investors.

Handbook of Research on Venture Capital

Handbook of Research on Venture Capital
Author: Hans Landstr”m
Publisher: Edward Elgar Publishing
Total Pages: 305
Release: 2012-01-01
Genre: Business & Economics
ISBN: 1781009112

ÔThis exciting second volume of cutting-edge research on venture capital takes up where volume one leaves off, bringing greater depth to topics covered in the first volume (such as angel investing) and adding new topics and insights. It poses interesting questions such as Ð Is venture capital in crisis? Are new models of early investing needed? Ð and offers carefully researched answers. Landstršm and Mason provide insightful commentary and skillfully pinpoint the contributions of a talented set of researchers. Both scholars and practitioners of venture capital will want to read this book.Õ Ð Harry J. Sapienza, University of Minnesota, US ÔThe second edition of the Handbook of Research on Venture Capital provides an important guidepost for venture capital researchers. As Landstršm and Mason point out, the nature of venture capital has changed dramatically over the last ten years. The asset class as a whole has failed to return principal and the old model is under tremendous strain. The contributors nicely highlight many of these changes, especially how venture capital has scaled beyond the US. For those of us active in venture capital research, the chapters raise many interesting research questions that deserve further attention.Õ Ð Andrew Zacharakis, Babson College, US This Handbook charts the development of venture capital research in light of the global financial crisis, starting with an analysis of the current venture capital market and the changing nature of the business angel market. Looking at governance structures, the performance of venture capitalists in terms of investments, economic impact and human capital, and the geographical organization of business angels and venture capital global ÔhotspotsÕ, this book also analyses the current state of venture capital research and offers a roadmap for the future.