Running company is very risky and its beginnings are perhaps the most difficult phase in the life cycle of a company, which in many cases discourages potential entrepreneurs from starting up. Budding entrepreneurs are yet to contend not only with the lack of start-up capital, but also with a lack of knowledge, experience and contacts that support successful business development. One way how to overcome these obstacles is to attend one of the programs of startup accelerators that provide novice entrepreneurs not only with starting capital, but also with experience, knowledge and contacts to entities that may be critical for the successful development of business. This thesis aims to determine the participants' satisfaction with Czech startup accelerator StartupYard and appraise the effectiveness of its functioning.

The present thesis focuses on founding and evolution of information technology startups. Special attention is given to the personality of the founder and the options of financing a startup in the Czech Republic. A survey among the students of the University of Economics, Prague regarding the general awareness of the issues related to the founding of a startup and the main obstacles to it is an integral part of the thesis. The main contribution of the thesis is a method for building up the IT startups, which may serve as a hand-book for potential future founders. As a secondary contribution, this thesis serves as a compact overview of the issues related to startups, especially to the person of the founder and financing possibilities in the Czech Republic.

This thesis deals with risk (venture) capital as an alternative source of funding mainly for small and medium-sized innovation-oriented enterprises. The aim of the first part is to provide an overview of the venture capital investment system. In addition to the theoretical introduction, the emphasis is on the analysis of the Czech venture capital market. Due to the membership of the Czech Republic in the EU, the Czech market is put in broader context of pan-European venture capital market and its regulation. In the final section, obstacles are identified that hinder the development of this market in the Czech Republic. Subsequently, the measures are introduced that could remedy the current situation.

This dissertation thesis concentrates on Venture Capital in the form of Business Angel investments in innovative companies in the Czech Republic. Primarily, the general knowledge of the Business Angel investments among entrepreneurs and students, the utilization rate of angel investments and the terms of cooperation between investors and entrepreneurs were analyzed. The main objective of this work is to design a methodological procedure of optimal cooperation between Business Angels and innovative entrepreneurs that has had a positive impact on the prosperity of all stakeholders. The theoretical framework summarizes the importance of Venture Capital as a source of funding new and innovative technology companies. Moreover, it focuses on realized research concerning angel investment in the USA and Great Britain. The primary research was realized in the form of interviews with investors and entrepreneurs, who had raised capital from Business Angels. As well, was realized five year long research among the students of universities all over the Czech Republic via questionnaire. Based on the analysis of secondary research and results from qualitative and quantitative research, were designed a normative model, descriptive model and methodology of cooperation between Business Angels and entrepreneurs. The proposed models and methodology respect the international practice, and the outputs have been tailored to the Czech environment as well.

1 Legal aspects of startup financing and venture capital investments Abstract The aim of this diploma thesis is to analyze the legal aspects of startup financing, especially with a focus on venture capital investments. As the transaction documentation related to venture capital investments usually contains a significant number of foreign language clauses and provisions, a part of my thesis is dedicated to these clauses and their detailed description using practical examples. The content itself is divided into three parts. The first of them generally defines the companies referred to as startups and their individual development stages. It also answers the question, startups are facing in their beginnings, of choosing the appropriate legal form. The conclusion of the first part is then focused practically on individual methods used for startup valuation. The second part is then focused on the venture capital investment realization and specific transaction documentation associated with capital investment. The beginning of the second part is focused on pre-contractual documentation referred to as the Term Sheet and legal Due Diligence. Subsequently, the Shareholders' Agreement and individual foreign language clauses and provisions are analyzed. Those provisions are part of the Shareholders' Agreement in order...

Unternehmensgründungen sind durch ein hohes Maß an Unsicherheit und durch eine häufige Notwendigkeit externer Beratung gekennzeichnet. Daher ist Smart Capital, als eine spezielle Finanzierungsform, die Kapital und Informationsflüsse in Form von Betreuung und Beratung verbindet, von besonderer Bedeutung für junge Unternehmen. Der empirische Teil der Dissertation analysiert die verschiedenen Typen von Finanziers, die als potentielle Anbieter von Smart Capital angesehen werden sowie regionale Einflüsse auf Finanzierungsbeziehungen im Rahmen von Smart Capital. Des Weiteren wird die Rolle der öffentlichen Hand auf dem Markt für Smart Capital untersucht. Die Analysen machen deutlich, dass viele verschiedene Typen von Finanziers als Anbieter von Smart Capital in Deutschland agieren. Regionale Nähe zwischen dem Investor und den finanzierten Unternehmen spielt dabei jedoch nur eine untergeordnete Rolle. Eine regionale Unterversorgung an Smart Capital für junge Unternehmen ist unter diesem Aspekt nicht zu befürchten. Des Weiteren zeigen die Ergebnisse, dass öffentlich geförderte Anbieter von Smart Capital ihre Förderfunktion im Wesentlichen erfüllen.

Background and Purpose: In the past years, Corporate Venture Capital (CVC) investments have substantially gained relevance. Corporations engage in this practice to reap strategic benefits that are usually only associated with entrepreneurial ventures and thereby drive innovation. While the success of CVC investments is undisputed, scholars have failed to provide a full description of the process that leads to the creation of strategic value for corporations. Therefore, we want to investigate the strategic value creation process in CVC and build a comprehensive framework thereof. The research question is thus: What is the process through which corporations create strategic value in CVC investments? Methodology: In line with pragmatism, we chose the methods best suited to answer the research question: Primary data will be obtained in face to face interviews with key individuals involved in the strategic value creation process in Husqvarna Group Ventures. Following methods from Morse (1994) and Alvesson & Kärreman (2011), we then analyse the data in a dialogue with our frame of reference. After the identification of a breakdown, an unexpected result that cannot be explained by current academia, we continue to build the framework applying two interpretive repertoires. To do so, we combine our findings with the fragmented existing literature to depict the strategic value creation process. Findings: We find that scholars have overlooked the complexity of the knowledge transfer, which is an integral part of strategic value creation. The CVC unit cannot directly access knowledge in their portfolio firms; instead, an active and involved effort needs to be made by the corporate to create learning opportunities, which can then be transformed into strategic value. The key to accessing knowledge can be found in what we call the knowledge sharing mechanism: An intricate interplay of relationships between the CVC unit and the portfolio firm. We find that corporates significantly commit to activities to build an environment that facilitates voluntary, reciprocal knowledge sharing. Conclusion: Business units must establish and maintain interpersonal relationships with their portfolio firms to meet corporate objectives of innovation and strategic value creation through CVC. The relationship acts a channel for the knowledge transfer, and by extension, as an enabler of strategic value creation. We fill a gap in the existing literature and provide an all-encompassing framework depicting the strategic value creation process of CVC investments with a focus on the relationships between the CVC unit and the portfolio firm. Researchers have neglected this aspect until now.

Prior literature suggests two competing theories regarding the role of venture capitalists (VCs) in their portfolio companies. The VC monitoring hypothesis argues that VCs effectively resolve the managerial agency problem through close monitoring and restraining managers' earnings management behavior. The VC moral hazard hypothesis argues that VCs aggravate the private benefits agency problem by exerting influence over managers to artificially inflate exit stock price through earnings management. Using a sample of IPO firms between 1987 and 2002, after controlling for the magnitude of accruals manipulation (AM), I compare the magnitude of real activities manipulation (RM) between venture-backed and non-venture-backed companies. I find that relative to non-venture-backed companies, venture-backed companies show significantly less RM in the first post-IPO fiscal year. The results are robust after controlling for the VC selection endogeneity. The finding supports the VC monitoring hypothesis that VCs restrain managers' RM behavior. Furthermore, I document that venture-backed companies exhibit a significant difference from non-venture-backed companies only in the first post-IPO fiscal year. The difference between the two groups in either the IPO year or the second post-IPO fiscal year is not significant, or at best, is weak. This finding is consistent with the argument that VCs tighten their control during the lockup expiration period when insiders such as managers or founders have strong incentives to inflate earnings. By the end of the second post-IPO fiscal year when VCs exit the portfolio companies, their impact on portfolio companies' RM decreases dramatically which makes the difference between the two groups less significant. In addition, using a sample of venture-backed IPOs from 1987 to 2002, I find that companies backed by high-reputation VCs show significantly less RM than those backed by low-reputation VCs in the first post-IPO fiscal year. The results are robust to alternative VC reputation proxies. This finding is consistent with the argument that high-reputation VCs have more incentives to preserve reputation and better ability to monitor managers than low-reputation VCs.

Thesis advisor: Thomas Chemmanur / My dissertation consists of three chapters. In the first chapter, I analyze the impact of firms' innovation success on their corporate financial policies. I hypothesize that innovation success reduces the information asymmetry facing firms and, through the information channel, affects their capital structure and dividend policies. I measure innovation success using the quantity and quality of patents. I show that firms with higher innovation success face lower information asymmetry, measured using analyst coverage, dispersion, and forecast error. Further, I show that firms with higher innovation success have lower leverage ratios; have a greater propensity to issue equity rather than debt; and have lower dividend payout ratios. I establish causality using instrumental variable analyses with patent examiner leniency as an instrument for patent grants. In the second chapter, co-authored with Thomas Chemmanur, Xuan Tian, and Qianqian Yu, we analyze the impact of trademarks in entrepreneurial firms' success. We hypothesize that trademarks play two economically important roles for entrepreneurial firms: a “protective” role, leading to better product market performance; and an “informational” role, signaling higher firm quality to investors. We develop testable hypotheses based on the above two roles of trademarks, relating the trademarks held by private firms to the characteristics of venture capital (VC) investment in them, their probability of successful exit, their valuations at their initial public offering (IPO) and in the immediate secondary market; institutional investor IPO participation; post-IPO information asymmetry; and post-IPO operating performance. We test these hypotheses using a large and unique dataset of trademarks held by VC-backed private firms. We establish causality using an instrumental variable (IV) analysis using trademark examiner leniency as the instrument. For private firms, we find that the number of trademarks held by the firm is positively related to the total amount invested by VCs and negatively related to the extent of staging by VCs. We show that the number of trademarks held by a firm increases its probability of successful exit (IPOs or acquisitions). Further, for the subsample of VC-backed firms going public, we show that the number of trademarks held by the firm leads to higher IPO and immediate secondary market firm valuations; greater IPO participation by institutional investors; a lower extent of information asymmetry in the equity market post-IPO; and better post-IPO operating performance. In the third chapter, co-authored with Thomas Chemmanur and Jinfei Sheng, we develop testable hypotheses and empirically analyze the effects of outside investors having access to soft information such as online employee ratings from the Glassdoor website on firms' financing and investment policies. We find that higher online employee ratings are associated with larger equity issue announcement effects; a greater propensity to have positive announcement effects and to issue equity rather than debt to raise external financing; higher investment expenditures; greater equity issue participation by institutional investors; and better long-run post-issue operating performance. We establish causality using a difference-in-differences methodology relying on the staggered adoption of anti-SLAPP laws across U.S. states. / Thesis (PhD) — Boston College, 2020. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

It is generally well understood that venture capital (VC) is an important and significant source of financing for small firms. Questions revolving around the increased likelihood of a firm backed by Venture Capitalists (VCs) to be export oriented have yet to be fully explored. Responding to this research gap, a sample of Canadian VC backed firms is used to compare the performance of Canadian VC firms in terms of facilitating internationalization among their portfolio companies. The particular reference of this study is Export Development Canada (EDC), a crown corporation mandated to promote export among Canadian firms. This research finds that EDC as a VC investor and export-oriented consultant has no association with the increased probability of exporting. Also, stage of the investment does not show any relationship with internationalization. These results run contrary to previous speculation that syndication of VCs increases the probability of internationalization among portfolio firms.