The Genesis of Venture Capital - Lessons from the German Experience

46 Pages Posted: 15 Apr 2003

See all articles by Ralf M. Becker

Ralf M. Becker

Deutsche Bank Securities, Inc. - Global Markets Research, Economy

Thomas F. Hellmann

University of Oxford - Said Business School; University of Oxford - Said Business School

Date Written: March 2003

Abstract

Why does venture capital work in some countries but not in others? This clinical study of the first German venture capital firm examines the difficulties of creating a venture capital market in a bank-based financial system. The analysis identifies the problem of creating appropriate governance structures to protect investor returns. It exposes the difficulties of established banks - not to mention government - to devise venture investment strategies. It identifies the availability of high quality entrepreneurs as a critical complement. And it provides a reinterpretation of the hypothesis of Black and Gilson (1997), arguing that the existence of an active stock market is a necessary, but by no means sufficient condition for the development of venture capital.

JEL Classification: G2, G3, M13

Suggested Citation

Becker, Ralf M. and Hellmann, Thomas F., The Genesis of Venture Capital - Lessons from the German Experience (March 2003). CESifo Working Paper Series No. 883; Sauder School of Business Working Paper. Available at SSRN: https://ssrn.com/abstract=386763

Ralf M. Becker

Deutsche Bank Securities, Inc. - Global Markets Research, Economy ( email )

60 Wall Street
Mail Stop: NYC60-1815
New York, NY 10005
United States

Thomas F. Hellmann (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain
+44 (0)1865 288937 (Phone)

HOME PAGE: http://www.sbs.ox.ac.uk/community/people/thomas-hellmann

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
872
Abstract Views
3,187
rank
27,535
PlumX Metrics