Financing Unquoted High-Growth Companies: From Extending

More documents

Recommendations

Info

espectievelijke omgeving. De verschillende studies binnen dit doctoraat tonen echter aan hoe ondernemers eveneens hun bedrijven selecteren als kandidaten voor het ontvangen van financiering van bepaalde investeerders. Alhoewel deze resultaten in lijn liggen met recent onderzoek, gaat mijn onderzoek een stap verder door aan te tonen hoe de rol van ondernemers de beslissing om al dan niet externe financiering aan te trekken overstijgt. Verder tonen de verschillende studies aan hoe initiële verschillen in het financieringsproces tussen bedrijven zich verder zetten doorheen de tijd. Initiële financieringsbeslissingen beïnvloeden latere financieringsbeslissingen en zelfs de ontwikkeling het volledig bedrijf. De processen die verklaren hoe verschillen ontstaan en hoe deze een blijvende impact hebben omvatten het lokale karakter van de zoektocht naar financiering, gebrekkig leren, verschillen in de professionalisering van bedrijven onder impuls van heterogene investeerders en routines die gehanteerd worden door investeerders om co-investeerders te selecteren. Deze processen staan in schril contrast met de focus in traditioneel financieringsonderzoek op neoklassieke economische concepten waaronder rationaliteit, homogeniteit van investeerders en perfecte contracten. xvi
Executive Summary High-growth companies contribute disproportionately to innovation, employment creation and value- added generation in most modern economies. Hence, firm growth is a central area of academic research and a major policy concern. Financial resources may cause sustainable differences in venture development, as financial resources allow ventures to invest in strategic assets. A suboptimal financial structure caused by finance constraints or limited knowledge of finance alternatives may constrain the future growth potential of a business and may even cause failure. Despite its importance our knowledge on relationship between finance and growth remains limited. The goal of the three studies in this dissertation is to further extend our knowledge on this relationship. The first study examines the importance of internal finance, debt finance and new equity finance in high-growth companies. Moreover, the study demonstrates how company characteristics influence the finance strategies of high-growth companies. While prior research has mainly focused on the role of new equity finance in the creation and growth of new ventures, this study demonstrates how the majority of high-growth companies never raise new equity finance. High-growth companies prefer to finance investments internally -whenever possible- thereby retaining debt capacity. When high-growth companies with a low risk profile lack internal finance they become more likely to raise debt finance. New equity issues, however, are especially important for high-growth companies with a high risk profile: unprofitable companies with low cashflows, high leverage, high risk of failure and significant investments in intangible assets. The study also demonstrates how high-growth companies that raised a particular type of finance become more likely to raise the same type of finance again in the future. The second study examines how particular types of investors affect the growth pattern of entrepreneurial ventures. Companies that initially raise finance from venture capital firms with more industry deal experience exhibit higher growth across time. This is not the case, however, for entrepreneurial companies that raise initial finance from investors with more overall deal experience. Moreover, companies that initially raise finance from older venture capital firms and venture capital xvii
Page 1 and 2: Faculty of Economics and Business A
Page 3: Financing Unquoted High-Growth Comp
Page 7 and 8: Acknowledgements This dissertation
Page 9 and 10: calls. We know everything about eac
Page 11 and 12: 1.4. Company Growth as a Complex Or
Page 13 and 14: 3.5.3. Alternative Explanations for
Page 15 and 16: List of Tables Chapter 1 Table 1.1
Page 17 and 18: List of Figures Chapter 1 Figure 1.
Page 19: De tweede studie gaat na hoe versch
Page 23 and 24: development as a whole. The process
Page 25 and 26: The rest of this introduction is st
Page 27 and 28: More significantly, finance scholar
Page 29 and 30: Furthermore, in light of current fi
Page 31 and 32: 1.2.1. Amount of Finance A first di
Page 33 and 34: Empirical research confirms that co
Page 35 and 36: the static trade-off theory are onl
Page 37 and 38: track record, will heavily rely on
Page 39 and 40: 1.2.4. Dynamics Companies have to m
Page 41 and 42: focusing on the acquisition of vent
Page 43 and 44: Moreover, historical finance decisi
Page 45 and 46: I. TELEOLOGY FIGURE 1.3 Process Mod
Page 47 and 48: 1.4.1. Growth Indicators, Growth Fo
Page 49 and 50: TABLE 1.2 Overlap (%) between Diffe
Page 51 and 52: Study 1: Incremental Finance Decisi
Page 53 and 54: accessible for a limited number of
Page 55 and 56: FIGURE 1.4 Early-Stage Entrepreneur
Page 57 and 58: Overall, a low level of entrepreneu
Page 59 and 60: timeframe of the study 3 . However,
Page 61 and 62: are collect through the financial a
Page 63 and 64: Two drawbacks of the Zephyr databas
Page 65 and 66: accurately remembering finance even
Page 67 and 68: experience of venture capital firms
Page 69 and 70: founding. The increased professiona
Page 71 and 72:
investments internally and not to a
Page 73 and 74:
contribute to the acquisition of ot
Page 75 and 76:
constraints (Himmelberg and Peterse
Page 77 and 78:
1.9. Structure of the Dissertation
Page 79 and 80:
Chandler G.N. and Hanks S.H. (1998)
Page 81 and 82:
Gregory B.T., Rutherford M.W., Oswa
Page 83 and 84:
Manigart S., De Waele K., Wright M.
Page 85 and 86:
Van Auken H. (2001) “Financing sm
Page 87 and 88:
2.1. Abstract This study examines i
Page 89 and 90:
Companies do not continuously raise
Page 91 and 92:
future expansion, financial distres
Page 93 and 94:
Despite contradictory empirical fin
Page 95 and 96:
lowers company value and in turn in
Page 97 and 98:
Hypothesis 2: High-growth companies
Page 99 and 100:
had to be for at least two years am
Page 101 and 102:
2.4.2. Dependent Variables: Finance
Page 103 and 104:
Percentage of firms using: TABLE 2.
Page 105 and 106:
Noteworthy is the high correlation
Page 107 and 108:
Internal finance: TABLE 2.4 Variabl
Page 109 and 110:
Internal finance: (EARNINGS/TOTAL A
Page 111 and 112:
in the probability of raising exter
Page 113 and 114:
Additional analyses on smaller sub-
Page 115 and 116:
Our results are important for acade
Page 117 and 118:
Barclay M.J., Smith Jr., C.W. and M
Page 119 and 120:
Helwege J. and Liang N. (1996) “I
Page 121 and 122:
Ou C. and Haynes G.W. (2006) “Acq
Page 123 and 124:
Chapter 3: Seeking Experienced or L
Page 125 and 126:
(Rindova, Williamson, Petkova and S
Page 127 and 128:
higher growth paths both in employm
Page 129 and 130:
The accumulated experience may not
Page 131 and 132:
offer finance by venture capital in
Page 133 and 134:
around three to five years (Zarutsk
Page 135 and 136:
effects of this potential confound.
Page 137 and 138:
It is conceptually convenient to de
Page 139 and 140:
it indicates how the mean initial s
Page 141 and 142:
The results of the unconditional an
Page 143 and 144:
significant quadratic trend. In thi
Page 145 and 146:
exhibit steeper growth curves both
Page 147 and 148:
obustness of the positive relations
Page 149 and 150:
employment and intangible assets ra
Page 151 and 152:
3.6. Discussion and Conclusion Most
Page 153 and 154:
suggest that venture capital firms
Page 155 and 156:
Baum J.A.C., Calabrese T. and Silve
Page 157 and 158:
Hoang H. and Rothaermel F.T. (2005)
Page 159 and 160:
Peixoto J.L. (1987) “Hierarchical
Page 161 and 162:
Appendix 1: Robustness Check In the
Page 163 and 164:
Chapter 4: Early Differences and Pe
Page 165 and 166:
financial resource mobilization fro
Page 167 and 168:
processes that make it difficult fo
Page 169 and 170:
Biotechnology, 2002). The biotechno
Page 171 and 172:
Table 4.2 differentiates between hi
Page 173 and 174:
to follow-up interviews, (4) financ
Page 175 and 176:
informants had difficulties in accu
Page 177 and 178:
for ventures to replicate the succe
Page 179 and 180:
A good illustration is the differen
Page 181 and 182:
corporate investor related to a big
Page 183 and 184:
In contrast to the image portrayed
Page 185 and 186:
4.5.2. Initial Differences in Growt
Page 187 and 188:
TABLE 4.6 Local Search and the Impa
Page 189 and 190:
investors related to the venture, a
Page 191 and 192:
persist across time and suggest it
Page 193 and 194:
performing biotechnology parent com
Page 195 and 196:
“In our venture capital firm the
Page 197 and 198:
Additionally, our cases illustrate
Page 199 and 200:
(Gargiulo, 1993). He approached not
Page 201 and 202:
that the availability and suitabili
Page 203 and 204:
and Eisenhardt, 2008). In this cont
Page 205 and 206:
ventures are often depicted as pass
Page 207 and 208:
Eisenhardt K.M. (1989b) “Agency t
Page 209 and 210:
Katila R., Rosenberger J.D. and Eis
Page 211 and 212:
Sorenson O. and Stuart T.E. (2001)
Page 213 and 214:
Chapter 5: Limitations, Avenues for
Page 215 and 216:
and despite these low leverage rati
Page 217 and 218:
Additionally, early investors may i
Page 219 and 220:
5.2.1. Entrepreneurs By studying th
Page 221 and 222:
investment strategy. Given the requ
Page 223:
Lerner J. (1999) “The government
show all

Financing Unquoted High-Growth Companies: From Extending

Create successful ePaper yourself

Delete template?

Save as template?