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The Capital Flow from Institutional Investors to Entrepreneurs

Alexander Peter Groh

EMLYON Research Centre for Entrepreneurial Finance; EMLYON Business School

February 4, 2010

This is a practitioner oriented paper. It deals with the two-staged capital allocation process from institutional investors to entrepreneurs. I first describe our knowledge about institutional investors’ criteria when they search promising countries for their venture capital investments. Next, I document research results on their selection of particular funds. This is followed by the discussion of the second step of the capital flow from the venture capital funds to entrepreneurs. I discuss literature on venture capitalists’ sorting criteria for entrepreneurial ventures and provide concluding remarks. The paper contributes to the understanding of the asset class and financial resource venture capital. It points to the selection process of the agents in the intermediary relation and documents the responsibilities of the delegated managers. Risk capital seeking entrepreneurs will benefit from the knowledge of their investors’ constraints and of the investment determinants for capital, directed from institutions to young ventures.

Number of Pages in PDF File: 27

Keywords: Institutional Investor, Asset Allocation, Venture Capital, Entrepreneurial Finance

JEL Classification: G11, G24

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Date posted: February 6, 2010  

Suggested Citation

Groh, Alexander Peter, The Capital Flow from Institutional Investors to Entrepreneurs (February 4, 2010). Available at SSRN: http://ssrn.com/abstract=1547791 or http://dx.doi.org/10.2139/ssrn.1547791

Contact Information

Alexander Peter Groh (Contact Author)
EMLYON Research Centre for Entrepreneurial Finance ( email ) ( email )
23 Avenue Guy de Collongue
Ecully, 69132
EMLYON Business School ( email ) ( email )
23 Avenue Guy de Collongue
Ecully, 69132
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