An Empirical Analysis of Venture Capital Exits in Europe and in the United States

Research output: Other contribution

Abstract

This paper focuses on exits by venture capitalists from their portfolio companies. Using a unique self-collected dataset, we provide new stylized facts about the venture capital industry in Europe and in the US. Overall, although there are numerous similarities between the US and Europe, there are also important differences, in particular with respect to the duration of exit stage, the use of convertible securities, the replacement of former management and deal syndication. Much of these differences can be brought to a common denominator, namely that European venture capitalists face a less liquid market for the human resources that go into the ventures as well as for the exit opportunities. The most striking difference is with respect to the use of convertible securities, which are by far less often used in Europe as compared to the US. Finally, the paper analyzes the impact of venture capital firms' characteristics and the use of different monitoring devices (stage financing, board representation, use of convertible securities and reporting of activities) on the exit route. Some aspects of close monitoring seem to significantly affect the venture's likelihood of going public. JEL Classification: F36; G15; G24; G32; G34
Original languageEnglish
Publication statusPublished - 2002

Fingerprint

Venture capital
Empirical analysis
Exit
Convertible securities
Venture
Monitoring
Venture capitalists
JEL classification
Firm characteristics
Replacement
Industry
Going public
Human resources
Stylized facts
Syndication
Venture capital firms
Financing

Keywords

  • convertible securities
  • start-up
  • exit
  • syndication
  • IPO
  • venture capital

Cite this

@misc{4c050429d7934bb6928fc50c3c740671,
title = "An Empirical Analysis of Venture Capital Exits in Europe and in the United States",
abstract = "This paper focuses on exits by venture capitalists from their portfolio companies. Using a unique self-collected dataset, we provide new stylized facts about the venture capital industry in Europe and in the US. Overall, although there are numerous similarities between the US and Europe, there are also important differences, in particular with respect to the duration of exit stage, the use of convertible securities, the replacement of former management and deal syndication. Much of these differences can be brought to a common denominator, namely that European venture capitalists face a less liquid market for the human resources that go into the ventures as well as for the exit opportunities. The most striking difference is with respect to the use of convertible securities, which are by far less often used in Europe as compared to the US. Finally, the paper analyzes the impact of venture capital firms' characteristics and the use of different monitoring devices (stage financing, board representation, use of convertible securities and reporting of activities) on the exit route. Some aspects of close monitoring seem to significantly affect the venture's likelihood of going public. JEL Classification: F36; G15; G24; G32; G34",
keywords = "convertible securities, start-up , exit, syndication, IPO, venture capital",
author = "Armin Schwienbacher",
year = "2002",
language = "English",
type = "Other",

}

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T1 - An Empirical Analysis of Venture Capital Exits in Europe and in the United States

AU - Schwienbacher, Armin

PY - 2002

Y1 - 2002

N2 - This paper focuses on exits by venture capitalists from their portfolio companies. Using a unique self-collected dataset, we provide new stylized facts about the venture capital industry in Europe and in the US. Overall, although there are numerous similarities between the US and Europe, there are also important differences, in particular with respect to the duration of exit stage, the use of convertible securities, the replacement of former management and deal syndication. Much of these differences can be brought to a common denominator, namely that European venture capitalists face a less liquid market for the human resources that go into the ventures as well as for the exit opportunities. The most striking difference is with respect to the use of convertible securities, which are by far less often used in Europe as compared to the US. Finally, the paper analyzes the impact of venture capital firms' characteristics and the use of different monitoring devices (stage financing, board representation, use of convertible securities and reporting of activities) on the exit route. Some aspects of close monitoring seem to significantly affect the venture's likelihood of going public. JEL Classification: F36; G15; G24; G32; G34

AB - This paper focuses on exits by venture capitalists from their portfolio companies. Using a unique self-collected dataset, we provide new stylized facts about the venture capital industry in Europe and in the US. Overall, although there are numerous similarities between the US and Europe, there are also important differences, in particular with respect to the duration of exit stage, the use of convertible securities, the replacement of former management and deal syndication. Much of these differences can be brought to a common denominator, namely that European venture capitalists face a less liquid market for the human resources that go into the ventures as well as for the exit opportunities. The most striking difference is with respect to the use of convertible securities, which are by far less often used in Europe as compared to the US. Finally, the paper analyzes the impact of venture capital firms' characteristics and the use of different monitoring devices (stage financing, board representation, use of convertible securities and reporting of activities) on the exit route. Some aspects of close monitoring seem to significantly affect the venture's likelihood of going public. JEL Classification: F36; G15; G24; G32; G34

KW - convertible securities

KW - start-up

KW - exit

KW - syndication

KW - IPO

KW - venture capital

M3 - Other contribution

ER -