Is the Behavior of German Venture Capitalists Different? Evidence from the Neuer Markt


Tykvová, Tereza


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URL: http://ub-madoc.bib.uni-mannheim.de/360
URN: urn:nbn:de:bsz:180-madoc-3600
Document Type: Working paper
Year of publication: 2003
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: G24 D82 G32 ,
Subject headings (SWD): Deutschland , Risikokapital , Going Public , Neuer Markt
Abstract: Using a unique, hand-collected database of all venture-backed firms listed on Germany's Neuer Markt, we analyze the history of venture capital financing of these firms before the IPO and the behavior of venture capitalists at the IPO. We can detect significant differences in the behavior and characteristics of German vs. foreign venture capital firms. The discrepancy in the investment and divestment strategies may be explained by the grandstanding phenomenon, the value-added hypothesis and certification issues. German venture capitalists are typically younger and smaller than their counterparts from abroad. They syndicate less. The sectoral structure of their portfolios differs from that of foreign venture capital firms. We also find that German venture capitalists typically take companies with lower offering volumes on the market. They usually finance firms in a later stage, carry through fewer investment rounds and take their portfolio firms public earlier. In companies where a German firm is the lead venture capitalist, the fraction of equity held by the group of venture capitalists is lower, their selling intensity at the IPO is higher and the committed lock-up period is longer.
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Tykvová, Tereza (2003) Is the Behavior of German Venture Capitalists Different? Evidence from the Neuer Markt. Open Access [Working paper]
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