Artikel
Risk management in the venture capital industry: Managing risk in portfolio companies
Managing risk is one of the main activities of venture capital companies. Despite the fact that this topic is of high practical relevance, only little research was published on risk management performed by venture capital companies in their ventures. Hence, we conducted a structured literature review which was the basis for developing five hypotheses concerning measures to decrease failure risk in venture capital-backed ventures. We tested these hypotheses with an empirical data set of 93 venture capital-backed ventures in Germany using original deal data from nine different venture capital funds using a structural equation model. We showed that the experience and the skills of the corresponding investment manager have a significant negative impact on the failure risk of a venture. Investment manager's experience and skills were measured by the working and founding experience, the technology expertise and the network size. Hence, the results emphasize the importance of the selection of the investment manager for risk management in venture capital investments.
- Language
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Englisch
- Bibliographic citation
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Journal: The Journal of Entrepreneurial Finance (JEF) ; ISSN: 1551-9570 ; Volume: 18 ; Year: 2016 ; Issue: 2 ; Pages: 1-33 ; Montrose, CA: The Academy of Entrepreneurial Finance (AEF)
- Classification
-
Management
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies
Entrepreneurship
New Firms; Startups
- Subject
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risk management
failure risk
venture capital
new-technology-based firms
- Event
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Geistige Schöpfung
- (who)
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Proksch, Dorian
Stranz, Wiebke
Pinkwart, Andreas
Schefczyk, Michael
- Event
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Veröffentlichung
- (who)
-
The Academy of Entrepreneurial Finance (AEF)
- (where)
-
Montrose, CA
- (when)
-
2016
- Handle
- Last update
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10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Proksch, Dorian
- Stranz, Wiebke
- Pinkwart, Andreas
- Schefczyk, Michael
- The Academy of Entrepreneurial Finance (AEF)
Time of origin
- 2016
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To hedge or not to hedge : managing demographic risk in life insurance companies
Gender, risk and venture creation intentions
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Managing portfolio risk using multivariate extreme value methods
Project risk management : managing software development risk
Managing GDP tail risk
Risk aversion, entrepreneurial risk, and portfolio selection
On portfolio risk estimation
Forecasting Credit Portfolio Risk
Forecasting credit portfolio risk
Risk and return management of venture capital companies in the post-investment phase
Risk and return management of venture capital companies in the post-investment phase
To hedge or not to hedge : managing demographic risk in life insurance companies
Gender, risk and venture creation intentions