The decreasing numbers of investments in early-stage start-ups indicate that fewer start-ups might become scale-ups and later sustainable business, affecting the eco- nomical development. Early-stage investment actors such as venture capital firms (VCs), incubators and business angels select and support investment in different ways. The VC and investment research mostly regards later-stage team and idea focused strategies. The thesis investigates what characterises and what is important for the early-stage process and selection of tenants pursued, through the investment process at the VC start-up Hidden Dreams, who combines incubator support with early stage investments. Organisational documents and previous research, presented in the frame of reference, lay the foundation for the analysis of the thesis. Research about VC selection strategies, investments, incubators, and more, paves the way of modeling a market need focused strategy combined with support. HD’s past pre-transaction processes and its current portfolio companies are analysed by the frame of reference. A model depicting the early-stage investment and support process is presented as a result, together with other findings in the analysis. The depiction explains the selection and support strategy and process by nine modules, each playing a role in the journeys of the VC and start-up. Insights about how the idea, team and market need affect the outcome of choice from the process are presented. The process becomes iteratively more characterised based on historical lessons. Since early-stage investments are considered risky, a way of minimising that risk can be seen through the combination of VC, incubator and business angel functions. The team and idea play a vital role in the process, especially the entrepreneur or advisor who contribute with market knowledge in the evaluation of market need. If the market inhibits competition the opportunity needs a hook, otherwise the initia- tors need to know why there is no competition. The team and idea plays important parts in the evaluation of market need. The idea works as initiator of the scope and to define value creation capabilities, whilst the entrepreneurial team, through the potential problem-owner, give each case market anchoring through experience and knowledge. / <p>Digital presentation</p>

In 2014, venture capitalist (VC) investments were as high as $87 billion for startup companies. Furthermore, although more than 50% of venture-backed startups failed, return on investment came from only 10% of the investee companies. The high VC investment dollars and the low number of profitable VC-backed startups suggest challenges that VCs might experience in identifying profitable startups. Using a real options theory conceptual framework, the purpose of this multiple case study was to explore strategies VCs in the southeastern United States use to identify profitable startups. Data collection included observation and archival document reviews and involved semistructured interviews of 11 VC participants in 8 firms who participated in assessing startups that led to an initial public offering or buyout within the past 5 years. Data analysis involved a coding technique for extrapolating themes. Several themes emerged including due diligence and investor involvement, reduction of information asymmetry, human capital management, environment and market forces, startup experience matching investor strategy, trust building, investment timing, and VC market dynamics. Findings from this study might contribute to positive social change by assisting VCs, entrepreneurs, and capital investors in identifying startups that lead to sustainable and profitable businesses. Sustainable and profitable businesses may result in stable jobs in the local community. Beneficiaries of this research include VCs, entrepreneurs, and capital investors.

This paper investigates the strategic framing approaches implemented by tech entrepreneurs in developing economies to attract financing from venture capital (VC) firms in developed economies. The study addresses the limited research in the field of entrepreneurship, specifically focusing on entrepreneurs’ subjective perspectives on strategically framing their startups to secure VC investment from developed economies. Additionally, it aims to make an initial contribution by exploring how these tech entrepreneurs in developing economies strategically frame their start-ups to attract VC funding from developed economies. The research methodology involves conducting semi-structured interviews with tech entrepreneurs who have successfully attracted VC financing through strategic framing.By analysing the interview data, we dive into the strategic framing approaches utilized by these tech entrepreneurs, with a particular emphasis on entrepreneurs in Kenya as the sample case, to secure financing from VC firms in developed economies. The insights shared by the interviewed tech founders highlight the crucial factors they strategically consider when framing their startups to attract VC financing. This strategic framing process involves extensive research, multiple iterations of pitch decks, metrics, and legal frameworks for a startup to raise VC financing. This study provides valuable insights into how entrepreneurs strive to understand venture capitalists’ perceptions of the Kenyan tech startup landscape and the criteria VC firms seek prior to making investments. Such knowledge empowers startup founders to position themselves strongly in terms of financial opportunities during the scaling and shaping phases of their tech startups. It is important to note that this study focuses on a small group of tech entrepreneurs in Kenya and may not capture potential industry, cultural, geographical, and personal variations. Nevertheless, it represents an initial attempt to explore the framing strategies of these startups when raising VC investments.

Under de senaste decennierna har Venture Capital marknaden genomgått flera faser av tillväxt och tillbakagång. Fenomenet har uppmärksammats av tidigare forskning som konstaterat att externa drivkrafter är en av de bakomliggande faktorerna till volatiliteten, men där det råder en oenighet kring effekten. Denna studie undersöker hur externa drivkrafter påverkar svenska Venture Capital investeringar under perioden 2007–2021. Syftet är att analysera och förklara hur externa drivkrafter påverkar Venture Capital bolagens investeringsbeteende. Genom regressionsanalyser undersöktes hur IPO, aktiemarknaden, BNP och styrräntan påverkar totala investeringar men även investeringar i de olika faserna (sådd-, uppstart- och senare fasen). Resultaten visar att IPO är den mest betydelsefulla drivkraften som påverkar Venture Capital investeringar positivt i alla faser. Effekten blir allt större ju mognare bolaget är, eftersom eventuell exit ligger närmre i tiden. Vidare indikerar resultaten på att en positiv aktiemarknad påverkar investeringar negativt, men där signifikans endast påvisades i såddfasen. Förvånande är att både BNP och styrräntan har en icke signifikant negativ inverkan på Venture Capital investeringar. Utifrån studien går det att dra slutsatsen att externa drivkrafter har varit en bakomliggande orsak till de stora fluktuationerna i VC-investeringarna. IPO-marknaden har störst inverkan eftersom drivkraften är direkt hänförbar till investeringsprocessen. Studien är viktig för att förstå vad som driver Venture Capital investeringar och resultaten kan vara till nytta för såväl entreprenörer i behov av finansiering och politiska beslutsfattare som strävar efter att bibehålla en gynnsam investeringsmiljö. / Over the past decades, the Venture Capital market has undergone several phases of growth and decline. This phenomenon has been acknowledged by previous researchers who have identified external drivers as an underlying factor of volatility, although the results differ. This study examines how external determinants influence the Swedish Venture Capital investments during the period 2007-2021. The aim is to analyze and explain how external determinants drive Venture Capital investments. Regression models were conducted to investigate how IPO, Stock market, GDP, and Interest rate affect both total investments and investments in different stages (seed, startup, and later stages). The results show that IPO is the strongest driver, positively affecting Venture Capital investments in all stages. The impact becomes greater as the company matures, since a potential exit is closer in time. Furthermore, the results indicate that a positive stock market has a negative impact on investments, although significance was only observed in the seed stage. Surprisingly, GDP and interest rate have a non-significant negative impact on Venture Capital investments. It can be concluded from this study that external determinants have been an underlaying cause of the fluctuations in Venture Capital investments. The IPO market has the greatest impact since it is directly related to the investment process. This study is important for understanding the drivers of Venture Capital investment, where the results can be useful for both entrepreneurs in need of financing and policymakers aiming to maintain a favorable investment environment.

This dissertation explores the influence of corporate venture capital (CVC) on the innovation of startups. Applying the ordinary least squares (OLS) regression and propensity score matching approach to the CVC investment data on China’s listed companies, we document that the CVC investment can determine the innovation level of startups.For further insight, invention patents and utility patents will be considered, in addition to a separate examination of the number of patent applications and patent grants. It is found that CVC participation, the number of CVC syndicate investors, and the level of CVC involvement, all have significantly positive effects on the total patent applications, total patent grants, utility patent applications, and utility patent grants in those listed startups after four years of their Initial Public Offering. However, CVC investments have no significant influence on the number of invention patent applications and patent grants. This result indicates that the influence of CVC investments on the innovation level of startups is still in the preliminary stage, and CVC investments only slightly affect the development of more challenging invention patents. / Business Administration/Finance

The topic of Impact Investing has been creating waves and generating a lot of interest in the funding ecosystem with the growth of impact startups &amp; because of pressure from the populace in the face of global challenges. At the same time the field has been under-explored by scholars. The exploration of the investment industry is performed by collecting investors' perspective on the self defined concept of Impact investing. The research attempts to portray the perspective of the established Venture Capital regime on Impact Investment and understand whether it is still perceived as philanthropic endeavors investing in an alternative asset class, suggested by previous academic research or an industry wide transition and change of investment practices as portrayed by the industry research. This study is focused on the Swedish &amp; U.S. Venture Capital regimes. Sweden, a country that has been described as the “Impact Capital”, and the U.S. that represents worlds largest VC capital sector. Semi-structured qualitative interviews were used in this study to explore the industry dynamics using a MLP(Multi Level Perspective) framework. The interviews with VCs help understand the current sentiment on the growth in impact investing and why the Swedish market is seeing an industry-wide transition while the U.S. VC’s treat it as a separate asset class.  The authors identified that the U.S. regime is currently in the emergence phase of transition while the Swedish regime has reached the transformation phase. Additionally four key themes that differentiate the perspective of the Swedish and US regimes were identified; Risk, Profitability, Use-Case &amp; Branding. / Impact Investing är ett ämne som har skapat vågor och genererat ett stort intresse för finansieringsekosystemet i samband med tillväxten av nystartade företag och påtryckningar från befolkningen inför de globala utmaningarna. Trots det har ämnet sett begränsad akademisk forskning. Explorationen av investeringsbranschen utförs genom att samla investerarnas perspektiv på det självdefinierade konceptet Impact Investing. Forskningen försöker skildra hur den etablerade riskkapitalregimen ser på Impact Investment och förstå om det fortfarande uppfattas som filantropiska initiativ av att investera i en alternativ tillgångskategori, som föreslås av tidigare akademisk forskning eller en branschomfattande övergång och förändring av investeringspraxis som framställts av industriforskningen.  Denna studie fokuserar på riskkapitalsregiment i Sverige och Amerika. Sverige, ett land som har beskrivits som "Impact Capital", och USA som representerar världens största VC-kapitalsektor. Semistrukturerade kvalitativa intervjuer används i denna studie för att utforska industridynamiken med hjälp av MLP(Multi Level Perspective)-ramverket. Intervjuerna med riskkapitalister hjälper till att förstå den nuvarande uppfattningen om tillväxten av impact investment och varför den svenska marknaden ser en branschomfattande förändringsprocess medan amerikanska VC:s behandlar det som en separat tillgångskategori. Författarna identifierade att den amerikanska regimen för närvarande befinner sig i begynnelsefasen medan den svenska regimen har nått transformationsfasen. Dessutom identifierades fyra nyckelteman som skiljer de svenska och amerikanska regimernas perspektiv; Risk, Lönsamhet, användningsfall &amp; varumärke.

With the increasing importance of the third mission of universities, namely the commercialisation of science and research, universities have established various mechanisms such as technology transfer offices, business incubators and more. Since many investors tend not to invest in university spin-offs and start-ups due to the risk associated with their early stage, universities have established their own investment units, referred to as university-affiliated venture capital, to provide funding for university spin-offs and start-ups. As there is little academic research on the structure and functioning of these investment units, this paper contributes to this research by analysing the structure and investment process of university-affiliated venture capitals. For this purpose, 10 investment units in Denmark, Finland, the Netherlands, Norway, and Sweden were analysed. Among the key findings of this work is the recognition that UVCs essentially look for the abilities ofthe founders and the possibility of developing them into an effective team when selecting ventures. Inaddition, the financing instruments offered, and the ticket sizes of the investment units could be identified. While many UVCs use both equity investment and convertible loans, there is a slight bias towards convertible loans as the potential target companies are at such an early stage that valuations are very difficult to conduct and the UVCs have limited resources. Ticket sizes generally vary between 25,000 and 100,000 thousand euros. / Med den ökande betydelsen av universitetens tredje uppgift, nämligen kommersialisering av vetenskap och forskning, har universiteten inrättat olika mekanismer som tekniköverföringskontor och företagsinkubatorer. Eftersom många investerare tenderar att inte investera i universitetsavknoppningar och nystartade företag på grund av den risk som är förknippad med deras tidiga skede, har universiteten inrättat sina egna investeringsenheter, så kallat universitetsanknutet riskkapital (UVC), för att tillhandahålla finansiering för universitetsavknoppningar och nystartade företag. Eftersom det inte finns så mycket akademisk forskning om strukturen och funktionen hos dessa investeringsenheter, bidrar denna uppsats till denna forskning genom att analysera strukturen och investeringsprocessen för universitetsanknutna riskkapitalbolag. För detta ändamål analyserades tio investeringsenheter; i Danmark, Finland, Nederländerna, Norge och Sverige. Bland de viktigaste resultaten av detta arbete finns insikten att UVC:er i huvudsak letar efter grundarnas förmågor och möjligheten att utveckla dem till ett effektivt team när de väljer ut företag. Dessutom kunde de finansieringsinstrument som erbjuds och investeringsstorlekarna identifieras. Även om många UVC:er använder både kapitalinvesteringar och konvertibla lån, finns det en viss övervikt för konvertibla lån eftersom de potentiella målföretagen befinner sig i ett så tidigt skede att värderingar är mycket svåra att genomföra och UVC:er har begränsade resurser. Investeringsstorlekarna varierar i allmänhet mellan 25 000 och 100 000 tusen euro.

Non-compete covenants are clauses in employment contracts that forbid employees from competing with their former employers during a given time period. Recent literature has identified non-compete covenants as a new type of entry barrier to entrepreneurship within high-tech industries, impeding regional innovation, growth and employment. In Europe, the legal regime is highly heterogeneous, suggesting that certain regions might gain a competitive advantage in innovation. This study uses Fixed Effects regression and Poisson Fixed Effects regression models to investigate the ways in which non-compete covenants effect how venture capital investments stimulate regional innovation and entrepreneurship. The data set was constructed using data from The European Patent Office, the Eurostat, the World Bank and the OECD Economic Outlook. Ius Laboris overview was used to assess the enforceability of non-compete covenants in sample countries. The results show that increased supply of venture capital increases innovative activity in all regions. Relative to countries that enforce non-compete covenants, countries that restrict the use of these contracts experience higher rates of patenting activity. The level of enforceability was not found to have significant effects on new firm formation. The results suggest that financial intermediates and the legal regime have an important role in promoting regional innovation.

Gender lens investing (GLI) considers gender-based factors across the investment process to advance gender equality and better inform investment decisions. It recognizes that gender-based discrimination persists in many areas of society, including access to economic opportunities. The aim of this study is to understand GLI as a phenomenon using the feminist standpoint theory. The research question guiding this study is: how does the management team of a venture capital fund interpret and implement gender-lens investing? The study conducted an in-depth case study on Company X, a venture capital fund that invests with a gender lens. The results were supported by interviews with the management team and company documents and were categorised according to the interpretations of GLI and key lessons to fulfil the aim. We conclude considerable efforts are underway to achieve the end goal of gender equality, however, in view of the shortcomings discussed, there is still room for improvement. The results and discussion can be used to better understand the phenomenon of GLI and lessons in the development of gender-responsive investment strategies.

Combining agency theory and the resource-dependence perspective as well as signalling theory, this thesis examines the role venture capitalists (VCs) and founders play with respect to both structural board characteristics and board capital in terms of experience and prestige and whether these are linked to performance. It claims that VCs and founders shape the governance system of the firms going public and are influential in the professionalisation of the ventures especially in terms of human and social capital of its board of directors. It also argues that the board of directors represents a signal of firm quality in the initial public offering (IPO) market and should thus be linked to performance. Similarly, according to the venture capital certification hypothesis, being funded by VCs signals a firm¿s quality and potential. In order to assess these claims, this thesis employs a unique sample of matched venturecapital- backed and non-venture-capital-backed entrepreneurial IPOs that floated either on the London Stock Exchange¿s Official List or the Alternative Investment Market (AIM). Extending previous research this thesis employs more fine-grained measures and introduces new conceptually relevant variables in the analysis. The findings indicate that VCs and founders are influential in shaping corporate governance of IPO-stage ventures both from an agency and resource-provision perspective. Findings from the examination of governance and professionalisation characteristics with respect to IPO short-run performance (underpricing) indicate that it may the involvement of prestigious auditors that signal firm quality while a founder bias discount seems to exist. While evidence is found that VC involvement (and to a lesser extent director/board characteristics) is related to post-IPO market performance, this seems to depend on the time period following the IPO examined, whereas auditor prestige shows a positive association in all of these time periods. / Bradford University School of Management