• Asian Journal of Innovation and Policy
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• v.7 no.1
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• pp.150-177
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• 2018

We review two specific risk management strategies of venture capitalists (VCs): deal syndication and domain specialization with respect to their explicit role in adjudging and managing the overall magnitude of information asymmetry risks. These are analyzed for three distinct categories of VC firms as classified by their funding stage focus (early vs. late), ownership type (foreign vs. domestic) and the human capital composition of the core VC team (entrepreneurial vs. investor). The analysis is based on both secondary data and primary data for active 72 VC firms in India. Syndication is moderately important for entrepreneurial VC firms, but not at all important for early-stage focused and foreign VC firms. This finding is distinctly different from what has been conventionally observed in the literature. Among the various arenas of domain specialization, high-technology focus is important for all segments of VC firms. In the context of investment-stage focus, foreign VC firms exhibit growth-stage specialization, while entrepreneurial VC firms concentrate on earlier investment stages.

• The Journal of Small Business Innovation
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• v.21 no.1
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• pp.43-59
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• 2018

This study investigates the relationship between venture capital (hereafter, VC) syndicate diversity and the IPO performance of an entrepreneurial company backed by the syndicate. Specifically, focusing on three types of diversity within a VC syndicate, which are aligned with Harrison and Klein's seminal categorization in 2007 (i.e., separation, variety, and disparity), this study suggests their distinct effects on performance. Two stage least square analyses with 1,127 VC syndicate investments made by 6,268 VC firms strongly supported the hypotheses. The results showed that that capacity diversity decreases the performance and that expertise diversity and network diversity increase it.

• Asia-Pacific Journal of Business
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• v.15 no.1
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• pp.179-192
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• 2024

Purpose - The purpose of this study is to examine the effect of entrepreneurial experience, business model innovation and financing on new venture performance. Design/methodology/approach - This study analyzes survey data on new ventures in Korea and investigated research hypothesis by multiple regression analysis. Findings - Founders' prior startup experience have different impacts on performance depending on whether they had a successful or failed startup. Successful experience has a positive impact on early performance, while failure experience has a negative impact. Business model innovation shows a positive and significant relationship with early performance. External financing has different effects depending on the type of funding source and performance variables. VC funding is positively related to employment creation, while government R&D funding is negatively related to sales volume. Research implications or Originality - This study confirms that the impact of entrepreneurial experience on early performance varies depending on the characteristics of successful and unsuccessful entrepreneurs. It also empirically confirms that business model innovation has a significant impact on early performance. We empirically examine the relationship between various external financing sources of venture firms and early performance. Since the effects of entrepreneurial experience, business model innovation, and external financing on early stage performance may be different, entrepreneurs should consider these relationships when pursuing early stage business opportunities.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.16 no.1
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• pp.1-19
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• 2021

The purpose of this research is to improve the investment success rate for startups in the water industry for the development of the entrepreneurial environment of the Korean water industry. In this research, we identified investment determinants through prior research and stratified them, and then surveyed the investor group at the beginning of the start-up using the FGI method, and determined the order of the investment determinants of investors. At the same time, we classified 41 start-ups related to the water industry into two groups: the group that received investment and the group that did not in the early stages of the start-up. Then we investigated the understanding of the investor's investment determinants, ranked them, and compared them by using the AHP technique. Through this, this research proposes five implications. First, it is important for start-ups in the early stages to receive seed investment to revitalize investment for startups in the water industry. For this, startups need to understand investors and prepare to attract investment with the perspective of angel investors rather than the perspective of VC investors. Second, Start-ups in the water sector should consider that the characteristics of the founder are important in order to receive seed investment, and also need to define their business at the industry and market level, and provide relevant rationale to meet the expectations of investors who value industry expertise and experience, and to increase the possibility of seed investment, which is important in the early stages of a startup. Third, institutions, such as K-water(Korea Water Resources Corporation), that support water industry startups need to conduct open innovation business opportunities discovery programs linked to startups so that startups currently participating in the startup support program could have business opportunities from the business infrastructure of platform-forming companies in the water industry. In particular, such institutions should help founders develop their industrial expertise and careers by supporting this type of start-up preparation process through the participation of in-house venture founders. Fourth, when K-water uses the government start-up support fund to discover and foster founders, it should increase initial contact with seed investors, conduct more thorough verification of business plans, and develop programs that use government start-up support funds to prepare a business suitable for seed angel investors. Fifth, K-water should support seed by connecting funds for initial investment among funds operated by itself. It is also necessary to develop a program that links the company receiving the seed investment with VC investment, not angel investment in cooperation with the VC fund operation entity participating as an LP so that companies that have attracted seed investment could attract follow-up VC investment.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.4
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• pp.1-18
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• 2019

Venture capitalists (VCs) play an important role in finding and growing innovative venture companies with high growth potential but high risk. Venture capital investment does not depend on the system, unlike the investment for listed companies. Korea's venture capital industry has entered a period of growth, but lack of data has led to a lack of research on venture capital. Based on this background, this study attempts to analyze various factors affecting investment decision criteria of Korea VCs. In this study, I examined the major factors that VCs consider in decision making of investment through literature review, and I have drawn the research question accordingly. I will focus on the characteristics of founders, products / services, markets, financials, and networks that scholars share common investment decision criteria in Korean VCs. For the purpose of this study, the data were collected through the questionnaire surveyed by investment vetters working in current venture capital and analyzed using AHP analysis. Through this study, I tried to understand the Korean venture capital which has been poorly studied and what criteria and priorities Korean VCs make investment decisions in the Korean venture investment environment. The results of this research will contribute to the vitalization of venture investment, which is important for the upbringing of companies, by providing guidelines for establishing investment attraction strategies of venture companies.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.14 no.1
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• pp.101-116
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• 2019

Technology-based start-up is important in that it encourages innovation, facilitates the development of new products and services, and contributes to job creation. Technology-based start-up activates entrepreneurship when appropriate support is provided within the ecosystem. Thus, understanding the technology-based start-up ecosystem is crucial. The purpose of this study is as follows. First, in Herrmann et al.'s(2015) study, we compare and analyze the ecosystem of each country by selecting representative regions such as Silicon Valley, Tel Aviv, London and Singapore which have the highest ranking in the start-up ecosystem. Second, we try to deeply understand the start-up ecosystem based on in-depth interviews with various stakeholders such as VC investors, start-ups, support organizations, and professors related to the Korean start-up ecosystem. Finally, based on the results of the study, we suggest development and activation of Korean technology-based start-up ecosystem. As a result, the Seoul start-up ecosystem showed a positive evaluation of government support compared to other advanced countries. In addition, it was confirmed that the ratio of tele-work and start-up company working experience of employees was higher than other countries. On the other hand, in Seoul, It was confirmed that overseas market performance, human resource diversity, attracting investment, hiring technological engineers, and the ratio of female entrepreneurs were lower than those of overseas advanced countries. In addition, according to the results of the interview analysis, Seoul was able to find that start-up ecosystems such as individual angel investors, accelerators, support institution, and media are developing thanks to the government's market-oriented policy support. However, in order for this development to continue, it is necessary to improve the continuous investment system, expansion of diversity, investment return system, and accessibility to the global market. A discussion on this issue is presented.