In this paper, we focus attention on serial crowdfunders, that is, entrepreneurs who repeatedly turn to crowdfunding to finance their projects. We argue that serial crowdfunders take advantage of the ...social contacts with those that backed their previous campaigns. This internal social capital developed within the platform, which is not available to “normal” serial entrepreneurs, makes serial crowdfunders’ campaigns more successful than those launched by novice crowdfunders. However, this type of social capital is a substitute for the internal social capital built by backing other campaigns, and has a limited lifespan. Econometric results on a sample of 31,389 Kickstarter campaigns confirm our contentions. Implications for research, practice, and policy are discussed.
This paper studies the combined effect of affiliation with prestigious universities, underwriters, and venture capitalists on the valuation of biotech ventures at IPO and their post-IPO performance. ...We argue that affiliation to a prestigious university provides the affiliated firm with a quality signal in the scientific domain. The pure quality signaling effect of the affiliation is isolated from the substantive benefits it provides by performing a difference-in-difference approach based on the scientific reputation of scientists in firms' upper echelons. The signal is stronger the weaker is the scientific reputation of scientists of the focal IPO-firm and is additive to those provided by prestigious venture capitalists and underwriters. Results for a sample of 254 European biotech ventures that went through an IPO between 1990 and 2009 confirm our predictions.
•Affiliations with a prestigious universities signals firms' quality in the scientific domain•We disentangle the pure signal effect of the affiliation from the substantial benefits it provides•This signal results in superior performance•The signal differs from and is additive to those provided by prominent VCs and underwriters
The nascent crowdfunding literature has highlighted the existence of a self–reinforcing pattern whereby contributions received in the early days of a campaign accelerate its success. After discussing ...what sustains this pattern, we maintain that the internal social capital that proponents may develop inside the crowdfunding community provides crucial assistance in igniting a self–reinforcing mechanism. Results of an econometric analysis of a sample of 669 Kickstarter projects are consistent with this view. Moreover, the effect of internal social capital on the success of a campaign is fully mediated by the capital and backers collected in the campaign's early days.
Using a new European Commission‐sponsored longitudinal dataset—the VICO dataset—we assess the impact of independent (IVC) and corporate venture capital (CVC) investments on the economic performance ...of European high‐tech entrepreneurial firms during the period 1992–2010. After controlling for potential sources of endogeneity and selection bias, our results indicate that both IVC and CVC investments boost portfolio firms' economic performance. These effects are mostly due to an increase in real sales value. Moreover, the dynamics of the impact of VC investments on firms’ overall economic performance and its components—real sales value, real fixed assets, and real labor costs—differs depending on the type of investor. Finally, we do not detect any impact related to the syndication of investments by both IVC and CVC investors.
In this paper, we jointly analyze the effects of the human capital of founders and access to venture capital (VC) financing on the growth of 439 Italian new technology-based firms (NTBFs). We rely on ...econometric models that control for survivorship bias and the endogeneity of VC financing. As to non-VC-backed firms, the competence-based argument that the capabilities of NTBFs coincide with founders' skills is confirmed. Nonetheless, once a NTBF obtains VC, this coincidence vanishes, pointing to the “coach” function performed by VC investors. Conversely, the view that sees the “scout” function as the main task performed by VC investors is not supported.
•Explores the link between recent STEM graduates’ entrepreneurial entry and human capital developed through university education.•Finds that entrepreneurial entry is more likely, if graduates exhibit ...a more specialized university curriculum.•Finds that entrepreneurial entry is positively associated with attendance of courses in economics and management.•Finds that graduation grade and university's scientific quality positively moderate the effect of curriculum specialization.•Finds that these effects weaken over time, but are still relevant five years after graduation.
University education is a crucial source of human capital and influences graduates’ choice of entrepreneurship as a career. Here, we discuss the contrasting effects on recent graduates’ entrepreneurial entry of the type and quality of the human capital developed through university education in STEM fields. We determine which effects prevail by examining the graduates who obtained a Master of Science degree in the period 2005–2009 from Politecnico di Milano. A university curriculum specialized into a limited number of scientific and technical fields, training in economics and management, and the scientific quality of the university in the research fields pertinent to the graduate's degree programme are positively associated with entrepreneurial entry immediately after graduation, while the graduation grade is not. The graduation grade and the scientific quality of the university positively moderate the impact of curriculum specialization. These effects weaken over time, but are still relevant five years after graduation.
We study the investment patterns of different types of venture capital (VC) investors in Europe: independent VC, corporate VC, bank-affiliated VC and governmental VC. We rely on a unique dataset that ...covers 1663 first VC investments made by 846 investors in 737 young high-tech entrepreneurial ventures in seven European countries. We compare the relative specialization indices of the different VC investor types across several dimensions that characterize investee companies: industry, age, size, stage of development, distance from the investor and country. Our findings indicate that VC investor types in Europe differ substantially in their investment patterns when compared to one another and that, in terms of investment patterns, governmental VC investors appear to be the most distinct type of VC investor. The investment patterns of different VC investors are stable over time and similar across different European countries. Finally, the investment patterns of the different VC investor types in Europe are significantly different from those observed in the USA.
The drivers of the valuations of entrepreneurial ventures are an important issue in entrepreneurial finance, but related research is fragmented. The theoretical perspectives and the drivers ...highlighted by previous studies differ based on the financial milestones during a venture’s lifecycle in which the valuation is performed (e.g., venture capital investments, initial public offerings, acquisitions). The introduction of new digital financing channels (e.g., crowdfunding, initial coin offerings) that allow retail investors to directly invest in entrepreneurial ventures challenge our understanding of the drivers of valuation. This change has also increased the diversity in the sequence of financial milestones that ventures go through, with important implications for valuation. We conduct a systematic literature review and develop a map highlighting how and why the drivers of venture valuations and their underlying theoretical lenses vary across the different milestones that ventures go through. The map allows us to outline new promising avenues for future research.
Plain English Summary
In this paper, we conduct a systematic literature review on entrepreneurial ventures’ valuation drivers and their underlying theoretical lenses, highlighting how and why they vary along firms’ life cycle. The valuation of entrepreneurial ventures is a challenging task for practitioners and a relevant issue that attracts the attention of scholars in entrepreneurship, finance, management, and economics. The literature on the topic is highly fragmented. Indeed, the context in which venture valuations are observed (e.g., in private deals or public offerings) differs across different financial milestones. The introduction of new digital financing channels (e.g., crowdfunding, initial coin offerings) and the increased diversity in the sequence of financial milestones that ventures go through further challenge our understanding of valuation drivers. This study is primarily aimed at scholars, offering them a map to create order in what we know about the drivers of entrepreneurial venture valuations and indicating promising avenues for future research.
► The
genetic characteristics of academic start-ups leave an imprint on firm development. In particular, they differently shape the strategies these firms adopt to enlarge their initial competence ...endowments with respect to non-academic start-ups. ► Academic start-ups find it easier to hire qualified (presumably technical) personnel and collaborate more with public research organisations than non-academic start-ups. In so doing they further improve their technological and scientific competencies. ► Academic start-ups do not exhibit a greater propensity than do their non-academic peers to resort to alliances with other firms or to make internal investments in the commercial function, so as to counterbalance the lack of industry-specific and managerial competencies of their founders.
This paper argues that academic high-tech start-ups exhibit peculiar “genetic characteristics” that leave an enduring imprint on firm development. We formulate a series of hypotheses on the effects of such genetic characteristics on the post-entry strategies that academic high-tech start-ups adopt to enlarge their initial competence endowments. In the empirical section, we use matched-pair statistical techniques and run several regressions to test the theoretical hypotheses. Our findings contribute to the literature on the antecedents of the strategies adopted by academic high-tech start-ups. They also allow us to derive implications for academic entrepreneurs, university managers and policy makers.
PDF
