Alternative investments: instruments, performance, benchmarks, and strategies. Baker K., Filbeck G. (eds). J. WIley & Sons, 2013. Chapter 11, p. 241-262. ISBN 9781118241127.
37 Pages Posted: 19 Mar 2016
Date Written: March 17, 2013
In this chapter, we introduce venture capital, a subset of the private equity asset class that focuses on investments in new or growing privately-held companies with high potential. We specifically address why venture capital markets exist; what the different venture capital models are; what venture capitalists do; how venture capital investors influence the development of their portfolio companies; and how venture capital as an asset class creates value for investors. For this purpose, we rely on an extensive and growing, but largely fragmented, stream of research on venture capital from respectively the finance, entrepreneurship and management fields.
Keywords: Venture capital, information asymmetry, business model, value chain, portfolio company performance, venture capital fund returns
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