TY - JOUR
T1 - The role of venture capital in the emerging entrepreneurial finance ecosystem
T2 - future threats and opportunities
AU - Bonini, Stefano
AU - Capizzi, Vincenzo
N1 - Publisher Copyright:
© 2019, © 2019 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2019/7/3
Y1 - 2019/7/3
N2 - The last decade has seen the emergence of alternative sources of early-stage finance, which are radically changing and reshaping the start-up eco-system. These include incubators, accelerators, science and technology parks, university-affiliated seed funds, corporate seed funds, business angels–including “super-angels”, angel groups, business angel networks and angel investment funds–and both equity- and debt-based crowdfunding platforms. In parallel with this development, large financial institutions that have traditionally invested in late-stage and mature companies, have increasingly diversified their investment portfolios to “get into the venture game”, in some cases, through the traditional closed-end funds model and, in other cases through direct investments and co-investments alongside the closed-end funds. This paper reviews the main features, investment policies and risk-return profiles of the institutional and informal investors operating in the very early stage of the life cycle of entrepreneurial firms. It concludes that traditional closed-end venture capital funds continue to play an important role in early stage finance because of their unique competences (e.g. screening, negotiating and monitoring) in what has become a wider and more complex financing ecosystem.
AB - The last decade has seen the emergence of alternative sources of early-stage finance, which are radically changing and reshaping the start-up eco-system. These include incubators, accelerators, science and technology parks, university-affiliated seed funds, corporate seed funds, business angels–including “super-angels”, angel groups, business angel networks and angel investment funds–and both equity- and debt-based crowdfunding platforms. In parallel with this development, large financial institutions that have traditionally invested in late-stage and mature companies, have increasingly diversified their investment portfolios to “get into the venture game”, in some cases, through the traditional closed-end funds model and, in other cases through direct investments and co-investments alongside the closed-end funds. This paper reviews the main features, investment policies and risk-return profiles of the institutional and informal investors operating in the very early stage of the life cycle of entrepreneurial firms. It concludes that traditional closed-end venture capital funds continue to play an important role in early stage finance because of their unique competences (e.g. screening, negotiating and monitoring) in what has become a wider and more complex financing ecosystem.
KW - Venture capital
KW - business angels
KW - equity crowdfunding
KW - startup financing
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U2 - 10.1080/13691066.2019.1608697
DO - 10.1080/13691066.2019.1608697
M3 - Review article
AN - SCOPUS:85066630059
SN - 1369-1066
VL - 21
SP - 137
EP - 175
JO - Venture Capital
JF - Venture Capital
IS - 2-3
ER -