Tag Archives: venture capital

Do investors and entrepreneurs match? – Evidence from the Netherlands and Sweden

Our paper Do investors and entrepreneurs match? – Evidence from the   Netherlands and Sweden has been accepted for publication at TFSC!

Abstract: Entrepreneurs and investors face challenges in the ‘thin market’ for early stage entrepreneurial finance. Improving this situation has been a priority of policy makers for at least a decade, however, the challenges in this matching process are still poorly understood. Theory suggests that matching problems may originate in different perceptions in areas such as evaluation criteria, risk and risk management by investors and entrepreneurs. To find a good match it seems essential to understand what is important to your counterpart. Based on a mixed methods approach using data collected in semi-structured interviews and a survey with both entrepreneurs and investors mostly active in green tech innovation, this study systematically analyses where their perceptions deviate and where frictions in the matching process may occur. We find that a mismatch exists in the perception of risk, the importance attached to risk, the search channels used to find a potential partner and the evaluation criteria applied in evaluating a proposition (i.e., exit, innovativeness, capabilities of teams). This paper suggests that increasing market transparency and creating a mutual understanding of the investment process will prevent potentially damaging perception misalignment from arising in the first place.

Download pre-print (free)

Download post-print

Beyond Venture Capital: An Exploratory Study of the Finance-Innovation-Policy Nexus in Cleantech.

Finally published: Our work on financing cleantech innovation through VC/PE.

In recent years, scholarly interest in financing for innovation has grown, particularly for mitigating climate change. However, extant literature has neglected the interaction of actors along the equity financing value chain, and the indirect effects of innovation and financial policy on the supply and demand of private equity (PE) and venture capital (VC). In this paper, we emphasize the importance of these understudied aspects through a comparative case study of equity finance for cleantech in the United States and Germany. We find that systemic interdependencies between institutional investors, VC/PE and policy makers influence the conditions for innovation – the ‘finance-innovation-policy nexus’. Adverse effects of policies affecting financial markets, in particular institutional investors, have to be taken into account to effectively mobilize private investments for (cleantech) innovation.

Download the preprint here

Access the postprint here