TY - GEN
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 -