This paper gives an overview on the main drivers for venture capital fundraising, and their impact on the supply and demand side of investments. First the differences between captive and independent venture capital firms and the difference between the supply and demand of venture capital investment are explained to prevent misunderstandings. The determinants of venture capital fundraising identified here are the Initial Public Offering, the overall economic growth, the capital gains tax rates, the labor market conditions, the financial reporting requirements, the firm’s specific performance and reputation, the existence and regulatory changes of private pension funds and governmental activities and support programs. In addition the impact of the financial crisis on venture capital fundraising has been identified and analyzed in four categories. The risk aversion as a consequence of the financial crisis, the decrease of valuation of venture capital-backed startups, the reduced interest rates and new restrictions and laws designed to protect countries and markets against future financial crisis.
Table of contents
List of figures
List of abbreviations
1 INTRODUCTION
1.1 Definition of Venture Capital
1.2 Independent vs. captive venture capital firms
1.3 Supply and demand effects on VCF
2 DETERMINANTS OF VCF
2.1 IPO
2.2 Overall economic growth
2.3 Capital gains tax rates
2.4 Labor market conditions
2.5 Financial reporting requirements
2.6 Firm’s specific performance and reputation
2.7 Private pension funds
2.8 Governmental activities and support programs
3 IMPACTS OF THE FINANCIAL CRISIS ON VCF
3.1 Risk aversion
3.2 Decrease of valuation of venture capital-backed startups
3.3 Reduction of interest rates
3.4 New restrictions and laws
4 CONCLUSION
References
- Quote paper
- Nicolas Klein (Author), 2010, Drivers of Venture Capital Fundraising and the Financial Crisis, Munich, GRIN Verlag, https://www.grin.com/document/182488
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