Two Worlds of Venture Capital: What Happened to U.S. and Dutch Early Stage Investment?

Two Worlds of Venture Capital: What Happened to U.S. and Dutch Early Stage Investment? European attempts at imitation of U.S. venture capital have been less successful in stimulating ‘high’ tech start-ups. Our analysis of the differences between Dutch and U.S. developments points at institutional and organizational differences as explanatory factors. Disappointing longer term performances of Dutch IPOs have caused the closure of the Dutch Parallelmarket. Indeterminate length of life of Dutch vc funds contributed to a loss of trust in early stage IPOs. The U.S. – in contrast – benefitted from contractually fixed length of life of venture capital funds. The U.S. share of early stage investment displayed a wave-like pattern, which is positively related to the number of IPOs and of vc firms. Interconnectedness and follow-on funds depress early stage investment. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Two Worlds of Venture Capital: What Happened to U.S. and Dutch Early Stage Investment?

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 1998 by Kluwer Academic Publishers
Subject
Business and Management; Management; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1023/A:1007932615195
Publisher site
See Article on Publisher Site

Abstract

European attempts at imitation of U.S. venture capital have been less successful in stimulating ‘high’ tech start-ups. Our analysis of the differences between Dutch and U.S. developments points at institutional and organizational differences as explanatory factors. Disappointing longer term performances of Dutch IPOs have caused the closure of the Dutch Parallelmarket. Indeterminate length of life of Dutch vc funds contributed to a loss of trust in early stage IPOs. The U.S. – in contrast – benefitted from contractually fixed length of life of venture capital funds. The U.S. share of early stage investment displayed a wave-like pattern, which is positively related to the number of IPOs and of vc firms. Interconnectedness and follow-on funds depress early stage investment.

Journal

Small Business EconomicsSpringer Journals

Published: Oct 6, 2004

References

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