The Size of Venture Capital and Private Equity Fund Portfolios

The Size of Venture Capital and Private Equity Fund Portfolios

We propose a model that examines the optimal size of venture capital and private equity fund portfolios. The relationship between a VC and entrepreneurs is characterized by double-sided moral hazard, which causes the VC to trade off larger portfolios against lower values of portfolio companies. We a...

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Main Authors: BERNILE, Gennaro, Cumming, Douglas, Lyandres, Evgeny
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2007
Subjects:
Venture capital
Private equity
Fund portfolio
Corporate Finance
Online Access:https://ink.library.smu.edu.sg/lkcsb_research/3665
https://ink.library.smu.edu.sg/context/lkcsb_research/article/4664/viewcontent/ventcapdoug_oct23_2006_jcf.pdf
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Institution: Singapore Management University
Language: English
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spelling sg-smu-ink.lkcsb_research-46642018-07-13T08:04:38Z The Size of Venture Capital and Private Equity Fund Portfolios BERNILE, Gennaro Cumming, Douglas Lyandres, Evgeny We propose a model that examines the optimal size of venture capital and private equity fund portfolios. The relationship between a VC and entrepreneurs is characterized by double-sided moral hazard, which causes the VC to trade off larger portfolios against lower values of portfolio companies. We analyze the structural relations between the VC's optimal portfolio structure and entrepreneurs' and VC's productivities, their disutilities of effort, the value of a successful project, and the required initial investment in a venture. We also test the model's predictions using a small proprietary dataset collected through a survey targeted to VC and private equity funds worldwide. 2007-09-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/lkcsb_research/3665 info:doi/10.1016/j.jcorpfin.2007.04.004 https://ink.library.smu.edu.sg/context/lkcsb_research/article/4664/viewcontent/ventcapdoug_oct23_2006_jcf.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Venture capital Private equity Fund portfolio Corporate Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Venture capital
Private equity
Fund portfolio
Corporate Finance
spellingShingle Venture capital
Private equity
Fund portfolio
Corporate Finance
BERNILE, Gennaro
Cumming, Douglas
Lyandres, Evgeny
The Size of Venture Capital and Private Equity Fund Portfolios
description We propose a model that examines the optimal size of venture capital and private equity fund portfolios. The relationship between a VC and entrepreneurs is characterized by double-sided moral hazard, which causes the VC to trade off larger portfolios against lower values of portfolio companies. We analyze the structural relations between the VC's optimal portfolio structure and entrepreneurs' and VC's productivities, their disutilities of effort, the value of a successful project, and the required initial investment in a venture. We also test the model's predictions using a small proprietary dataset collected through a survey targeted to VC and private equity funds worldwide.
format text
author BERNILE, Gennaro
Cumming, Douglas
Lyandres, Evgeny
author_facet BERNILE, Gennaro
Cumming, Douglas
Lyandres, Evgeny
author_sort BERNILE, Gennaro
title The Size of Venture Capital and Private Equity Fund Portfolios
title_short The Size of Venture Capital and Private Equity Fund Portfolios
title_full The Size of Venture Capital and Private Equity Fund Portfolios
title_fullStr The Size of Venture Capital and Private Equity Fund Portfolios
title_full_unstemmed The Size of Venture Capital and Private Equity Fund Portfolios
title_sort size of venture capital and private equity fund portfolios
publisher Institutional Knowledge at Singapore Management University
publishDate 2007
url https://ink.library.smu.edu.sg/lkcsb_research/3665
https://ink.library.smu.edu.sg/context/lkcsb_research/article/4664/viewcontent/ventcapdoug_oct23_2006_jcf.pdf
_version_ 1770571750857244672

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