Determinants of Success in Private Equity-Venture Capital Investments
This paper investigates the determinants of performance of the investments of private equity and venture capital (PEVC) funds in Brazil. We use two unique databases: the First Brazilian Private Equity and Venture Capital Census and the Guia-GVcepe Endeavor, with information on this industry for the...
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| Format: | Article |
| Language: | English |
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Brazilian Society of Finance
2011-06-01
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| Series: | Revista Brasileira de Finanças |
| Subjects: | |
| Online Access: | http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/2825/2224 |
| _version_ | 1818172283264434176 |
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| author | Antonio Gledson de Carvalho Eduardo Madureira Rodrigues Siqueira Humberto Gallucci Netto |
| author_facet | Antonio Gledson de Carvalho Eduardo Madureira Rodrigues Siqueira Humberto Gallucci Netto |
| author_sort | Antonio Gledson de Carvalho |
| collection | DOAJ |
| description | This paper investigates the determinants of performance of the investments of private equity and venture capital (PEVC) funds in Brazil. We use two unique databases: the First Brazilian Private Equity and Venture Capital Census and the Guia-GVcepe Endeavor, with information on this industry for the period 1999 to 2007. As measures of performance we use the percentage and number of exits through IPO, acquisition by a company or by another investor. Our results indicate that the factors influencing the performance of investments are: size of the fund, number of investments, the practice of co-investment, experience and foreign origin of the managing organization, focus on late stage, intensity of contact between managers and portfolio companies and the number of seats on the boards of the invested companies. The number of successes grows with the number of investments at a declining rate. This can indicate 1) a limit to the ability of managers or 2) that a large number of investments allows for greater diversification of risk, directing investments to companies of high risk but with a high upside. |
| first_indexed | 2024-12-11T19:10:09Z |
| format | Article |
| id | doaj.art-73ff7491e13344bc8987739aad424164 |
| institution | Directory Open Access Journal |
| issn | 1679-0731 1984-5146 |
| language | English |
| last_indexed | 2024-12-11T19:10:09Z |
| publishDate | 2011-06-01 |
| publisher | Brazilian Society of Finance |
| record_format | Article |
| series | Revista Brasileira de Finanças |
| spelling | doaj.art-73ff7491e13344bc8987739aad4241642022-12-22T00:53:48ZengBrazilian Society of FinanceRevista Brasileira de Finanças1679-07311984-51462011-06-0192189208Determinants of Success in Private Equity-Venture Capital InvestmentsAntonio Gledson de CarvalhoEduardo Madureira Rodrigues SiqueiraHumberto Gallucci NettoThis paper investigates the determinants of performance of the investments of private equity and venture capital (PEVC) funds in Brazil. We use two unique databases: the First Brazilian Private Equity and Venture Capital Census and the Guia-GVcepe Endeavor, with information on this industry for the period 1999 to 2007. As measures of performance we use the percentage and number of exits through IPO, acquisition by a company or by another investor. Our results indicate that the factors influencing the performance of investments are: size of the fund, number of investments, the practice of co-investment, experience and foreign origin of the managing organization, focus on late stage, intensity of contact between managers and portfolio companies and the number of seats on the boards of the invested companies. The number of successes grows with the number of investments at a declining rate. This can indicate 1) a limit to the ability of managers or 2) that a large number of investments allows for greater diversification of risk, directing investments to companies of high risk but with a high upside.http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/2825/2224private equityventure capitalinvestment exitperformance |
| spellingShingle | Antonio Gledson de Carvalho Eduardo Madureira Rodrigues Siqueira Humberto Gallucci Netto Determinants of Success in Private Equity-Venture Capital Investments Revista Brasileira de Finanças private equity venture capital investment exit performance |
| title | Determinants of Success in Private Equity-Venture Capital Investments |
| title_full | Determinants of Success in Private Equity-Venture Capital Investments |
| title_fullStr | Determinants of Success in Private Equity-Venture Capital Investments |
| title_full_unstemmed | Determinants of Success in Private Equity-Venture Capital Investments |
| title_short | Determinants of Success in Private Equity-Venture Capital Investments |
| title_sort | determinants of success in private equity venture capital investments |
| topic | private equity venture capital investment exit performance |
| url | http://bibliotecadigital.fgv.br/ojs/index.php/rbfin/article/view/2825/2224 |
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