Gegenstand der Arbeit ist die Untersuchung der jüngsten Veränderungen in der institutionellen Mikrostruktur des deutschen Kapitalmarktes, die geeignet sind die Bedingungen für die Versorgung junger Technologieunternehmen mit Eigenkapital zu verbessern. Behandelt werden insbesondere die Funktionsweise und zunehmende Bedeutung professioneller Venture Capital-Intermediäre und die hierzu komplementäre Rolle des “Neuen Marktes” in Deutschland.
Der Autor zeigt, wie die Finanzierung junger Technologieunternehmen durch strukturelle Imperfektionen des Kapitalmarktes in besonderem Maße beeinträchtigt wird. Unter Berücksichtigung der fundamentalen Aussagen der neoklassischen Kapitalmarkttheorie und der Neuen Institutionenökonomik wird die Hypothese entwickelt, daß die durch die Unvollkommenheit der Märkte bedingten Risikoprämien und Transaktionskosten im Falle von Frühphaseninvestitionen in innovativen Unternehmen besonders hoch sind. Somit besteht im Falle dieser Investitionen eine erhebliche Spanne zwischen den vom Unternehmer zu tragenden Kapitalkosten und den vom Financier empfangenen Nettoerträgen.
Bestimmte Institutionen des Kapitalmarktes, d. h. spezialisierte Intermediäre und regulierte Marktsegmente sind geeignet diese Spanne zwischen Kapitalkosten und Nettoerträgen zu vermindern, indem nicht-projektinhärente Risiken oder Transaktionskosten reduziert werden. Das für die Investitionsentscheidung maßgebliche Risiko-Rendite-Verhältnis einer Investition wird somit durch institutionelle Rahmenbedingungen erheblich beeinflußt.
Der Autor diskutiert vor diesem theoretischen Hintergrund umfassend die konkreten Veränderungen des deutschen Venture-Capital-Marktes in der jüngsten Zeit und entwirft verschiedene Szenarien für dessen zukünftige Entwicklung.
Keywords: Venture Capital, Neuer Markt, Unternehmensgründung, Innovationsmanagement
Table of Contents
1 Introduction
2 Venture Capital Finance and the New Technology Based Firm
2.1 Telling the difference: Venture Capital and Private Equity
2.1.1 What is Venture Capital?
2.1.2 Private Equity distinguished
2.2 Early Stage and other Venture Capital Investments
2.2.1 The Life-Cycle-Model: Early and other Stages of Venture Capital Finance
2.2.2 Divestments and Holding Periods
2.2.3 New Companies and Special Situations Segment
2.2.4 The Nature of Early Stage Investments
2.3 The New Technology Based Firm
2.3.1 What is a New Technology Based Firm?
2.3.2 The Life Cycle of a New Technology Based Firm
2.3.3 Strategic Idiosyncrasies of Technology Industries
2.3.4 Venture Capitalist and the New Technology Based Firm
2.3.5 RIGHT-ES2: Early Stage Investments in New Technology Based Firms
3 The Landscape of Venture Capital Finance
3.1 Informal Investors
3.2 The Organized Venture Capital Market
3.2.1 Financial Investors
3.2.1.1 Private Investors
3.2.1.2 Institutional Investors
3.2.1.2.1 Financial Intermediaries
3.2.1.2.2 Specialized Added Value Intermediaries: Venture Capitalists
3.2.2 Strategic Investors: Corporate Venture Capitalists
3.2.3 Political Investors: Government and its Agencies
3.3 Institutional Venture Capital - How „hot” is it really?
4 Institutions of the Venture Capital Market in Germany
4.1 Venture Capital in Capital Market Theory and New Institutional Economics
4.2 Venture Capital as an Institution
4.2.1 Venture Capital as a Finance Technology
4.2.1.1 Equity
4.2.1.2 Visibility, Reputation and Trust
4.2.1.3 Selection and Assessment
4.2.1.4 Monitoring and Incentive Alignment
4.2.1.5 Management Support and Added Value
4.2.2 Which strategy is right? Diversification or specialization?
4.2.3 Venture Capitalist, its Network and Portfolio Companies as a governance structure
4.2.3.1 Comparing Venture Capital Firm, its Network and Portfolio Companies with Multidivisional Organizations - A Visual Stop-Over
4.2.3.2 The Discovery Part: V-CTORY - The Virtual Venture Capital Network Factory
4.3 The Role of the Neuer Markt
4.3.1 Why the Geregelter Markt failed
4.3.2 Why the Neuer Markt may succeed
5 Conclusion
Objective & Topics
This work examines the peculiarities of early-stage investments in new technology-based firms (NTBFs), identifies causes for existing financing problems, and explores how recent structural changes in the German capital market can facilitate increased investment volumes in technology startups.
- Capital Market Theory and New Institutional Economics applied to venture capital.
- The distinct lifecycle and financial needs of new technology-based firms.
- The role of various investor types (informal, institutional, corporate, and political).
- Governance structures in venture capital, including the V-CTORY model.
- Analysis of the Neuer Markt as a mechanism for reducing uncertainty and transaction costs.
Excerpt from the Book
2.1.1 What is Venture Capital?
Various definitions of venture capital have emerged with time. They mainly differ in the broadness of their conceptual extent.
Liles (1974, p. 461) provides an overview of the "spectrum of definitions of venture capital investing”, including the following:
„1. Investing in any high-risk financial venture
2. Investing in unproven ideas, products or start-up situations; i. e. the provision of what is called ‘seed capital’
3. Investing in going concerns that are unable to raise funds from conventional public or commercial sources
4. Investing in large and - in some cases - controlling interests in publicly traded companies where there is a considerable degree of uncertainty."
Pfirrmann, Wupperfeld and Lerner (1997, p. 10) note, in looking at the venture capital intermediating institutions that a current "comprehensive description of venture capital companies has to include the following activities:”
PInvestment in the seed, start-up and other early stages
PInvestment in established companies that are unable to finance their expansion through banks or the stock exchange
PInvestment in management buyouts and leveraged buyouts
PInvestment on the stock exchange where patient, supportive investment can facilitate ongoing business development"
The broadness of these descriptions of venture capital finance, which basically refer to all sorts of non-publicly raised equity capital, may cause misunderstanding. A more narrow, precise definition of venture capital may facilitate communication. Therefore I suggest to depart from attempts to define venture capital as all sorts of money provided by presumable venture capitalists, to instead seek to capture the distinguishing, essential features of venture capital.
Summary of Chapters
1 Introduction: Provides an overview of the rising importance of early-stage investments in high-technology industries as a key driver of structural change and innovation.
2 Venture Capital Finance and the New Technology Based Firm: Defines venture capital and establishes the specific lifecycle and financial challenges associated with technology-based startups.
3 The Landscape of Venture Capital Finance: Categorizes the various types of investors operating in the market, from informal "business angels" to institutional and corporate venture capitalists.
4 Institutions of the Venture Capital Market in Germany: Analyzes the German market through the lens of capital market theory and new institutional economics, with a specific focus on the Neuer Markt.
5 Conclusion: Synthesizes the findings, highlighting the necessity of professionalized, specialized venture capital for the growth of technology industries in Germany.
Keywords
Venture Capital, Private Equity, New Technology-Based Firms, NTBF, Capital Market Theory, New Institutional Economics, Early-Stage Investment, Transaction Costs, Agency Theory, Governance Structures, Neuer Markt, Innovation, Startup Finance, Risk Management, Corporate Venture Capital
Frequently Asked Questions
What is the primary focus of this work?
The paper explores the complexities of early-stage financing for new technology-based firms (NTBFs), specifically analyzing the German venture capital market and its structural limitations.
What are the central research questions addressed?
The work investigates why early-stage funding for high-tech startups is challenging and how institutional changes in the German capital market, such as the introduction of the Neuer Markt, help reduce transaction and agency costs.
Which theoretical frameworks are utilized?
The author applies Capital Market Theory and New Institutional Economics, particularly Transaction Cost Theory and Principal-Agent Theory, to explain investment behaviors.
What is the core methodology?
The research uses a theoretical analysis of market structures, supported by a literature review and comparative insights between the US and German financial systems.
What does the main body cover?
It covers definitions of venture capital versus private equity, the lifecycle and specific risks of NTBFs, and the functions of various investor groups including governmental support agencies.
What defining characteristics link this work to its keywords?
The work revolves around the intersection of technology innovation, financial intermediation, and institutional design, making keywords like "Governance Structures" and "Agency Theory" central to the argument.
What is the "V-CTORY" model introduced by the author?
The V-CTORY model is a conceptual governance structure proposed by the author, representing a "Virtual Venture Capital Network Factory" that combines elements of market and hierarchy to achieve strategic and operational synergies.
How does the author evaluate the "Neuer Markt"?
The author views the Neuer Markt as a necessary quality segment that fills a gap in the German exit landscape, helping to reduce information asymmetry for investors compared to the failed Geregelter Markt.
- Citar trabajo
- Fritz Holger Ludewig (Autor), 1998, Early Stage Investments in New Technology Based Firms - Analyzing the Changing German Landscape of Venture Capital Finance in the Light of Capital Market Theory and New Institutional Economics, Múnich, GRIN Verlag, https://www.grin.com/document/185244
