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Full-Text Articles in Business
Learning From Manipulable Signals, Mehmet Ekmekci, Leandrro Gorno, Lucas Maestri, Jian Sun, Dong Wei
Learning From Manipulable Signals, Mehmet Ekmekci, Leandrro Gorno, Lucas Maestri, Jian Sun, Dong Wei
Research Collection Lee Kong Chian School Of Business
We study a dynamic stopping game between a principal and an agent. The agent is privately informed about his type. The principal learns about the agent’s type from a noisy performance measure, which can be manipulated by the agent via a costly and hidden action. We fully characterize the unique Markov equilibrium of this game. We find that terminations/ market crashes are often preceded by a spike in (expected) performance. Our model also predicts that, due to endogenous signal manipulation, too much transparency can inhibit learning. As the players get arbitrarily patient, the principal elicits no useful information from the …
How To Make Venture Capital Funding Work For You, Ser Keng Ang
How To Make Venture Capital Funding Work For You, Ser Keng Ang
Research Collection Lee Kong Chian School Of Business
From Facebook to Google, some of the biggest brands we know today got their start from venture capital funding. Prof Ang Ser Keng from the Lee Kong Chian School of Business, shares how and when involving venture capitalists in your startup can propel it to success.
Patents, Innovation, And Performance Of Venture Capital-Backed Ipos, Jerry X. Cao, Fuwei Jiang, Jay R Ritter
Patents, Innovation, And Performance Of Venture Capital-Backed Ipos, Jerry X. Cao, Fuwei Jiang, Jay R Ritter
Research Collection Lee Kong Chian School Of Business
We study the predictive power of patents on the long-run performance of venture capital (VC)-backed initial public offerings (IPOs). We show that VC-backed IPOs that have at least one patent at the time of the IPO substantially outperform other VC-backed IPOs, with 3-year buy-and-hold market-adjusted returns of -7.1% vs. -23.3%. On average, VC-backed IPOs without patents perform similarly to non-VC-backed IPOs. We also report that VC-backed IPOs from 1981-1998 outperformed other IPOs, but the pattern has reversed for IPOs from 1999-2006. Although a smaller proportion of non-VC-backed IPOs possess patents, those with patents also outperform those without patents.
Do Venture Capitalists Play A Monitoring Role In An Emerging Market: Evidence From The Pay-Performance Relationship Of Chinese Entrepreneurial Firms?, Jerry X. Cao, Qigui Liu, Gary G. Tian
Do Venture Capitalists Play A Monitoring Role In An Emerging Market: Evidence From The Pay-Performance Relationship Of Chinese Entrepreneurial Firms?, Jerry X. Cao, Qigui Liu, Gary G. Tian
Research Collection Lee Kong Chian School Of Business
This paper investigates venture capitalists’ monitoring of managerial behaviour by examining their impact on CEO pay-performance sensitivity across various controlling structures in Chinese firms. We find that the effectiveness of venture capitalists' monitoring depends on different types of agency conflict. In particular, we find that venture capital (VC) monitoring is hampered in firms that experience severe controlling-minority agency problems caused by disproportionate ownership structures. We provide further evidence that VC is more likely to exert close monitoring in firms that have greater managerial agency conflict, and thus require more direct monitoring. However, controlling-minority agency problems have a greater impact on …
The Size Of Venture Capital And Private Equity Fund Portfolios, Gennaro Bernile, Douglas Cumming, Evgeny Lyandres
The Size Of Venture Capital And Private Equity Fund Portfolios, Gennaro Bernile, Douglas Cumming, Evgeny Lyandres
Research Collection Lee Kong Chian School Of Business
We propose a model that examines the optimal size of venture capital and private equity fund portfolios. The relationship between a VC and entrepreneurs is characterized by double-sided moral hazard, which causes the VC to trade off larger portfolios against lower values of portfolio companies. We analyze the structural relations between the VC's optimal portfolio structure and entrepreneurs' and VC's productivities, their disutilities of effort, the value of a successful project, and the required initial investment in a venture. We also test the model's predictions using a small proprietary dataset collected through a survey targeted to VC and private equity …
The Relationship Between Governance Structure And Risk Management Approaches In Japanese Venture Capital Firms, Toru Yoshikawa, Phillip H. Phan, Jonathan Linton
The Relationship Between Governance Structure And Risk Management Approaches In Japanese Venture Capital Firms, Toru Yoshikawa, Phillip H. Phan, Jonathan Linton
Research Collection Lee Kong Chian School Of Business
This paper attempts to understand what drives Japanese venture capital (JVC) fund managers to select either active managerial monitoring or portfolio diversification to manage their firms' investment risks [J. Bus. Venturing 4 (1989) 231]. Unlike U.S. venture capitalists that use active managerial monitoring to gain private information in order to maximize returns [J. Finance 50 (1995) 301], JVCs have traditionally used portfolio diversification to attenuate investment risks [Hamada, Y., 2001. Nihon no Bencha Kyapitaru no Genkyo (Current State of Japanese Venture Capital), Nihon Bencha Gakkai VC Seminar, May 7]. We found that performance pay is positively related to active monitoring …
Venture Capital And Economic Growth: An Industry Overview And Singapore's Experience, Francis Koh, Winston T. H. Koh
Venture Capital And Economic Growth: An Industry Overview And Singapore's Experience, Francis Koh, Winston T. H. Koh
Research Collection Lee Kong Chian School Of Business
This paper provides an overview of the venture capital industry, and its development in Asia and Singapore. Venture capital plays an important role in innovation and economic growth. Indeed, the resurgence of the United States as a technology leader is intimately linked to the success of Silicon Valley. As Singapore enters the next phase of economic development, the creation of internal engines of growth is an urgent task. The Singapore government has done much to provide an environment for entrepreneurship to thrive. Its success at replicating the Silicon Valley culture will be important for Singapore's future economic success.