TY - JOUR
T1 - Determinants of the incidence and scale of seed capital investments by venture capital firms
AU - Dimov, Dimo
AU - Murray, Gordon
PY - 2008/2/1
Y1 - 2008/2/1
N2 - Employing both behavioral decision making and agency theories, our study seeks to identify those factors that influence a venture capital (VC) firm's decision to undertake seed capital investments and, subsequently, the scale of such activity. Using data on the investments made by 2949 VC funds raised worldwide between 1962 and 2002, we find investor age, timing of investment, and fund location to be of importance. In addition, the size of the fund and the existing number of portfolio firms exert opposite influences on the level of seed capital activity of the VC firm. These results suggest that seed activity is a valuable source of market intelligence for leading VC firms seeking proactively to identify and invest in novel technologies.
AB - Employing both behavioral decision making and agency theories, our study seeks to identify those factors that influence a venture capital (VC) firm's decision to undertake seed capital investments and, subsequently, the scale of such activity. Using data on the investments made by 2949 VC funds raised worldwide between 1962 and 2002, we find investor age, timing of investment, and fund location to be of importance. In addition, the size of the fund and the existing number of portfolio firms exert opposite influences on the level of seed capital activity of the VC firm. These results suggest that seed activity is a valuable source of market intelligence for leading VC firms seeking proactively to identify and invest in novel technologies.
UR - http://www.scopus.com/inward/record.url?scp=39149130649&partnerID=8YFLogxK
UR - http://dx.doi.org/10.1007/s11187-006-9008-z
U2 - 10.1007/s11187-006-9008-z
DO - 10.1007/s11187-006-9008-z
M3 - Article
AN - SCOPUS:39149130649
SN - 0921-898X
VL - 30
SP - 127
EP - 152
JO - Small Business Economics
JF - Small Business Economics
IS - 2
ER -