1997 | OriginalPaper | Chapter
Framework Conditions for Venture Capital: Results of the Literature Review
Authors : Dr. Oliver Pfirrmann, Professor Dr. Udo Wupperfeld, Professor Dr. Joshua Lerner
Published in: Venture Capital and New Technology Based Firms
Publisher: Physica-Verlag HD
Included in: Professional Book Archive
Activate our intelligent search to find suitable subject content or patents.
Select sections of text to find matching patents with Artificial Intelligence. powered by
Select sections of text to find additional relevant content using AI-assisted search. powered by
Venture capital funds raise capital to invest in new business projects. These funds act as agents between the entrepreneurs who face search costs in locating funding, and uninformed institutional and individual investors. While venture capital comprises a relatively small percentage of capital market activities in the US, it provides an important source of funding for small businesses and offers the potential for high returns for investors. The industry has been responsible for helping to establish numerous successful enterprises. Among them are Apple Computer, Intel, Federal Express, Microsoft, and Lotus Development. Venture capitalists, unlike many other equity market participants, take active roles within their portfolio firms. In addition to the deal’s origination, screening, evaluation, and structuring, they are responsible for monitoring the venture’s post-investment activities on behalf of the investors in their managed funds. A venture capitalist often takes some form of a non executive managerial position within the portfolio company.