Venture capital in europe

Venture Capital in Europe


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Venture Capital in Europe

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Venture Capital in Europe
Edited by

Greg N. Gregoriou
Maher Kooli
Roman Kraeussl

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PARIS • SAN DIEGO • SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO
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Contents

Foreword by Josh Lerner
Preface and Acknowledgments
About the Editors
List of Contributors

Part One

1

2

3

European Venture Capital Markets: Recent Developments
and Perspectives

Venture capital in Europe: Closing the gap to the U.S.
Andreas Oehler, Kuntara Pukthuanthong, Marco Rummer,
and Thomas Walker

xiii
xv
xvii
xix

1
3

1.1 Introduction

1.2 The European and U.S. venture capital markets – a comparison
1.3 Economic effects and government intervention
1.4 Conclusion
References

3
4
10
14
15

Public venture capital across Europe: A 15-year perspective
Christof Beuselinck and Sophie Manigart

19

2.1 Introduction
2.2 Public versus private VC
2.3 Hypotheses
2.4 Data
2.5 The evolution of public VC in Europe
2.6 Multivariate analyses
2.7 Conclusion
References

19
20
21
22
23

27
29
30

Why venture capital markets are well developed in some countries but
comparatively small in others: Evidence from Europe
Kuntara Pukthuanthong, Dolruedee Thiengtham, and Thomas Walker

33

3.1
3.2
3.3

33
34
36

Introduction
Literature review
Data


vi

4

5

6

Contents

3.4 Methodology and results
3.5 Conclusion
References

43
47
48

A survey of the venture capital industry in Central and Eastern Europe
Rachel A. Campbell and Roman Kraeussl

51

4.1 Introduction
4.2 The route of transition and the current economic environment
4.3 Recent developments of VC funding in CEE
4.4 An action plan towards a well-functioning VC market
4.5 Conclusion
References
Appendix

51
52
54
62
64
65

67

Venture capital in European transition economies: A scoring system
Robert W. McGee

71

5.1 Introduction
5.2 Some factors to consider
5.3 Results
5.4 Conclusion
References

71
72
78
81
82

Recommendations for the development of a European venture capital
regulatory corpus: Lessons from the U.S.
Edward J. Lusk, Gregor Schmidt, and Michael Halperin

85

6.1
6.2

Introduction
Wealth creation: the final launch price and its market

implications
6.3 A study of strategic price setting from the U.S.
6.4 Results
6.5 Summary of the U.S. study
6.6 Recommendations and conclusion
References

Part Two
7

Evaluation, Exit Strategies, and Theoretical Aspects

85
86
88
89
93
93
96

99

Productivity growth in Spanish venture-backed firms
Luisa Alemany and José Martí

101

7.1 Introduction
7.2 Literature review and hypotheses
7.3 Data and methodology

7.4 Results
7.5 Conclusion
References

101
102
105
109
112
113


Contents

8

9

10

11

vii

Is the Spanish public sector effective in backing venture capital?
Marina Balboa, José Martí, and Nina Zieling

115

8.1

Introduction
8.2
The role of venture capital
8.3
Data and descriptive analysis
8.4
Methodology
8.5
Results
8.6
Conclusion
References

115
116
118
122
123
124
126

A review of the venture capital industry in Italy
Fabio Bertoni, Massimo G. Colombo, Annalisa Croce, and Evila Piva

129

9.1
Introduction
9.2
Venture capital in Italy: the supply side

9.3
Venture capital in Italy: the demand side
9.4
The effect of venture capital on NTBF performance
9.5
Public policy in support of the venture capital industry
9.6
Conclusion
References

129
131
135
138
139
140
141

Exit strategy and the intensity of exit-directed activities among venture
capital-backed entrepreneurs in Sweden
Anders Isaksson

143

10.1 Introduction
10.2 Research framework
10.3 Data collection
10.4 Results and discussion
10.5 Conclusion
References

143
145
149
151
154
155

Private equity fund managers do not overvalue their company investments
Tom Weidig, Andreas Kemmerer, Tadeusz Lutoborski,
and Mark Wahrenburg

157

11.1 Introduction
11.2 Valuation guidelines
11.3 Literature review
11.4 Data sample
11.5 Empirical findings
11.6 Conclusion
References
Appendix

157
158
158
160
161
166
167

168


viii

12

Contents

A search model of venture capital, entrepreneurship, and unemployment
Robin Boadway, Oana Secrieru, and Marianne Vigneault

171

12.1 Introduction
12.2 The model
12.3 The social optimum
12.4 Optimal policy
12.5 Conclusion
References
Appendix

171
172
177
179
181
182
184

Part Three Financing and Contracting
13

14

15

185

Capital structure in new technology-based firms: Venture capital-backed
versus non-venture capital-backed firms in the Irish software sector
Teresa Hogan and Elaine Hutson

187

13.1 Introduction
13.2 Theoretical background and testable implications
13.3 Survey and sample characteristics
13.4 Capital structure
13.5 Founders’ perceptions of information asymmetries
13.6 Conclusion
References

187
188
190
192
194
196
197

German business ventures – entrepreneurs, success factors, and financing
Ann-Kristin Achleitner, Christoph Kaserer, Niklas Wagner, Angela Poech,
and Martin Brixner

199

14.1 Introduction
14.2 Research set-up
14.3 Results
14.4 Conclusion
References

199
200
202
214
215

Financing practices in the German venture capital industry:
An empirical study
Andreas Bascha and Uwe Walz

217

15.1 Introduction
15.2 Theoretical background
15.3 The data
15.4 Descriptive analysis
15.5 Does theory match with practice?

15.6 Conclusion
References

217
218
221
221
224
228
229


Contents

16

17

ix

Covenants in venture capital contracts: Theory and empirical evidence
from the German capital market
Ron C. Antonczyk, Wolfgang Breuer, and Klaus Mark

233

16.1 Introduction
16.2 Venture capital, agency problems, and hold-up
16.3 Incentive instruments in venture capital financing relationships
16.4 Empirical data

16.5 Contract design and characteristics of portfolio firms
16.6 Conclusion
References

233
234
236
237
241
245
246

Supply and demand of venture capital for biotech firms: The case
of the Belgian regions of Wallonia and Brussels
Véronique Bastin, Georges Hübner, Pierre-Armand Michel,
and Mélanie Servais
17.1 Introduction
17.2 Context
17.3 Venture capital in Belgium
17.4 Methodology
17.5 Literature: relevant dimensions
17.6 Empirical material
17.7 Analysis of perceptions
17.8 Conclusion
References

Part Four
18

19

Performance

249

249
251
251
252
255
258
266
270
272

275

Simple and cross-efficiency of European venture capital firms using data
envelopment analysis
Greg N. Gregoriou, Maher Kooli, Philipp Krohmer, and Rainer Lauterbach

277

18.1 Introduction
18.2 Background
18.3 Methodology
18.4 Data
18.5 Empirical results
18.6 Conclusion
References

277
278
280
284
288
293
293

Agency theory and management buy-out: The role of venture capitalists
Hans Bruining and Arthur Herst

297

19.1
19.2
19.3

297
298
302

Introduction
Agency theory
Management buy-out


x

20

Contents

19.4 Agency theory and management buy-out
19.5 Conclusion
References

305
307
308

Does the value of venture capital vary over the investee life cycle? Evidence
from Irish investees
Nancy Huyghebaert and Sheila O’Donohoe

311

20.1
20.2
20.3
20.4
20.5
20.6

21

Introduction
Literature review and development of hypotheses
Sample selection
Venture capitalist involvement in investee firms

Valuation of venture capitalists by investees
Relation between venture capitalist involvement and their
perceived contribution to performance
20.7 Conclusion
References

311
314
316
318
323

German banks as venture capitalists
Tereza Tykvová

331

21.1
21.2
21.3

331
332

Introduction
Venture capital in Germany
Duration of the venture capital financing and the venture capitalists’
retention rate
21.4 Hypotheses
21.5 Data

21.6 Multivariate analyses
21.7 Conclusion
References
Appendix
22

23

324
328
329

333
334
335
337
339
340
341

Long-run venture-backed IPO performance analysis of Italian family-owned
firms: What role do closed-end funds play?
Stefano Caselli and Stefano Gatti

343

22.1 Introduction
22.2 Literature and hypotheses
22.3 Data sample and methodology
22.4 Empirical results

22.5 Explanations of IPO underperformance
22.6 Conclusion
References

343
346
351
354
356
359
360

Securitization and venture capital fundraising
Paul U. Ali

365

23.1
23.2

365
366

Introduction
European private equity securitizations


Contents

24

xi

23.3 Generic Collateralized Private Equity Obligations structure
23.4 Investors in CPOs
23.5 Funds of private equity funds
23.6 Conclusion
References

366
367
368
369
369

Total loss risk in European versus U.S.-based venture capital investments
Dieter G. Kaiser, Rainer Lauterbach, and Denis Schweizer

371

24.1
24.2

371

Introduction
Determinants of total losses of pre-market equity
capital stakes
24.3 Data description
24.4 Description of the model

24.5 Results
24.6 Conclusion
References

Index

372
375
377
378
385
386

389


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Foreword

During the 1980s and 1990s, there was a tremendous boom in the American venture
capital industry. The pool of U.S. venture funds – partnerships specializing in early stage
equity or equity-linked investments in young or growing firms – has grown from just over
US$1 billion in 1980 to about US$160 billion at the end of 2005. Despite the pattern of
boom-and-bust that has characterized the sector – the rapid increases in fundraising in
the late 1960s, mid-1980s, and late 1990s were followed by precipitous declines in the
1970s, early 1990s, and early 2000s – the American venture industry today is far more
developed and mature than it was in earlier decades.
In recent years, this growth has extended outside the U.S.: Israel, India, and China

are just three examples of nations that have experienced a dramatic surge in venture
investment. In part, the capital has been provided by home-grown groups, but affiliates
or branch offices of U.S.-based groups are playing an increasingly important role.
Much of this growth seems to have by-passed Europe. European venture capital funds
have long been overshadowed by the funds specializing in buy-outs and other later-stage
transactions: not only have the level of such activities been far lower than elsewhere but
so have the returns. While there was a brief surge of European venture capital activity
in the late 1990s, it proved short-lived and many of the new entrants collapsed early
in this decade. Many of the policy initiatives of that era, such as the creation of the
pan-European EASDAQ market for young growth companies, have been written off as
failures.
The small size and very modest success of the European venture capital industry is troubling because considerable evidence has emerged that venture capitalists play an important
role in encouraging innovation. The types of firms that these organizations finance –
whether young start-ups hungry for capital or middle-aged firms that need capital to
grow – pose numerous problems and uncertainties that discourage other investors.
To be sure, the financing of entrepreneurial firms is a risky business. Uncertainty
and informational gaps often characterize these firms, particularly in high-technology
industries. These information problems make it difficult to assess these firms, and permit opportunistic behavior by entrepreneurs after the financing is received. To address
these information problems, venture investors employ a variety of mechanisms, which
seem to be critical in boosting innovation. A considerable body of evidence suggests that
the early participation of venture firms – including their guidance, monitoring, shaping of management teams and boards, networking, and credibility – helps innovators
successfully nurture start-ups and sustain their success long after their company goes
public.
Thus, the state of the European venture capital market is an important public policy
issue. This collection of essays will help scholars, investors, and academics better


xiv

Foreword

understand the challenges faced by the European venture industry and – hopefully –
suggest steps that can address some of these problems.
Josh Lerner
Jacob H. Schiff Professor of Investment Banking
Harvard Business School


Preface

After looking for information on European venture capital we noticed that there was not
enough literature in this area and strongly believed an edited book on the subject was
warranted. The articles exclusive to this book represent the latest cutting-edge research
that examines venture capital in Europe.

Acknowledgments

We would like to thank Karen Maloney, publishing editor at Elsevier, for her support
throughout the entire process; and Dennis McGonagle, assistant editor at Elsevier. We
would also like to thank the copyeditor, Sue Thomas, as well as the handful of anonymous
referees of the selection of papers for inclusion in this book.


This page intentionally left blank


About the Editors

Greg N. Gregoriou is Associate Professor of Finance and coordinator of faculty research in
the School of Business and Economics at the State University of New York (Plattsburgh).

He obtained his Ph.D. (Finance) from the University of Quebec at Montreal, which is part
of the joint Doctoral Program in Administration that merges the resources of Montreal’s
four major universities (McGill, Concordia, and HEC). He is hedge fund editor and
editorial board member for the peer-reviewed scientific journal Derivatives Use, Trading
and Regulation published by Palgrave-MacMillan in London. He has authored over 50
articles on hedge funds and managed futures in various U.S. and U.K. peer-reviewed
publications, including the Journal of Portfolio Management, Journal of Futures Markets,
European Journal of Operational Research, Annals of Operations Research, European
Journal of Finance, Journal of Asset Management, and Journal of Derivatives Accounting,
etc. This is his fourth edited book with Elsevier and his latest book is entitled Initial
Public Offerings: An International Perspective.
Maher Kooli is Assistant Professor of Finance at the School of Business and Management,
University of Quebec in Montreal (UQAM). He holds a Ph.D. in Finance from Laval
University (Quebec) and was a postdoctoral researcher in finance at the Center of Interuniversity Research and Analysis on Organisations. Maher also worked as a Senior Research
Advisor for la Caisse de Depot et Placement de Quebec (CDP Capital). He has published
articles in a wide variety of books and journals including the Journal of Multinational
and Financial Management, the Financial Management, The Journal of Private Equity,
the Canadian Investment Review, Derivatives Use and Trading Regulations, FINECO,
and Gestion. He has co-authored a book entitled Principes de Gestion financiere, Gaëtan
Morin edition. His current research interests include alternative investments, initial public
offerings, and mergers and acquisitions.
Roman Kraeussl obtained a first-class honours Masters in Economics with a specialization
in Financial Econometrics at the University of Bielefeld, Germany, in 1998. He completed
his Ph.D. in Financial Economics on the Role of Credit Rating Agencies in International
Financial Markets at Johann Wolfgang Goethe-University, Frankfurt/Main, Germany,
in 2002. As the Head of Quantitative Research at Cognitrend GmbH, he was closely
involved with the financial industry. Currently he is Assistant Professor of Finance at the
Free University of Amsterdam and research fellow with the Centre for Financial Studies,
Frankfurt/Main. He is a specialist on venture capital and private equity and has written
numerous papers on these topics. Roman is also a Research Fellow at the Center for

Financial Studies in Frankfurt/Main.


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List of Contributors

Luisa Alemany holds a B.Sc. in Economics and Business Administration from the Complutense University of Madrid, an M.B.A. from Stanford (U.S.A.) and a Ph.D. in Corporate
Finance from Complutense University of Madrid. She has gained professional experience
in consulting with McKinsey & Co, in finance with Goldman Sachs, and in venture capital
with The Carlyle Group. She is currently part of the Finance faculty at ESADE Business
School (Barcelona, Spain). Her main research interests are venture capital, valuation of
start-ups and companies in general, entrepreneurship, and corporate finance.
Paul U. Ali is an Associate Professor in the Faculty of Law, University of Melbourne and
a Visiting Associate Professor in the Faculty of Law, National University of Singapore.
Paul was previously a finance lawyer in Sydney. Paul has published several books and
journal articles on finance and investment law, including, most recently, Opportunities in
Credit Derivatives and Synthetic Securitisation (London, 2005) and articles in Derivatives
Use, Trading and Regulation, Journal of Alternative Investments, Journal of Banking
Regulation, and Journal of International Banking Law and Regulation.
Ron C. Antonczyk is assistant at the chair of Finance at RWTH Aachen University,
Germany’s leading Technical University. In 2003 he received his diploma in Business
Studies at Humboldt University, Berlin. He has written a textbook on the basics of
corporate finance. His research interests include corporate finance and particularly venture
capital.
Marina Balboa is Associate Professor of Economics at the University of Alicante, Spain.
She has a Ph.D. in Business Administration (Finance) from the University of Alicante. She
has published in several international as well as Spanish journals. Her research areas are
venture capital, private equity, and corporate finance.

Andreas Bascha joined the German Central Bank in 2002, after he received his Diploma
and Ph.D. in Economics from the University of Mannheim and University of Tübingen, in
1996 and 2001, respectively. From 1996 to 2001 he was research and teaching assistant at
the University of Bochum and the University of Tübingen. He received a prize from Ernst
& Young Stiftung E.V., Stuttgart for his Ph.D. dissertation. His area of specialization
is contract theory, and his recent research interests include venture capital, financial
intermediation, and banking supervision, especially Basel II. He is currently working in a
senior position at the Department of Banking Supervision and Bank Examinations at the
German Central Bank, Regional Office in Mainz, Germany.


xx

List of Contributors

Véronique Bastin is a Ph.D. student at HEC Management School – University of Liège,
Belgium. She has been F.N.R.S. (Belgian National Fund for Scientific Research) Research
Fellow at the Research Center for Management of Bio-Industries at the University of Liège.
She holds a Masters Degree in Management from the School of Business Administration
of the University of Liège. She also studied for one year at Maastricht University, and
visited the University of Quebec at Montreal for three months. She is currently finalizing
her thesis, which deals with the financial management of biotechnology firms. She has
written several papers related to investment and financing policy in the bio-industry and
has presented some of them at international finance conferences in Canada and Europe.
Fabio Bertoni is a researcher at the Department of Management, Economics and Industrial
Engineering at the Politecnico di Milano. His research activity is in the field of corporate
finance. His research interests include venture capital and corporate governance.
Christof Beuselinck is Assistant Professor of Accounting at Tilburg University and research
fellow of CENTer. He holds a doctoral degree from Ghent University and was a Marie
Curie research fellow at Manchester University. Christof has a specialization in financial

reporting of SMEs and VC-backed firms and has written several working papers on the
financial reporting characteristics of VC-backed firms, which are currently under review
in international peer-reviewed journals.
Robin Boadway is Sir Edward Peacock Professor of Economic Theory at Queen’s University and a Fellow of CESifo and the Institute of Intergovernmental Relations. He studied at
RMC, Oxford and Queen’s and has been a visiting scholar at the Universities of Chicago,
Oxford, and Louvain. He has served in the past as President of the Canadian Economics
Association and Head of the Department of Economics at Queen’s. He has been editor of
the Canadian Journal of Economics and the German Economic Review, and is currently
editor of the Journal of Public Economics. His research work is in the broad area of
public sector economics, with special emphasis on fiscal federalism, tax policy, social
policy, and cost–benefit analysis. He has been involved in projects for various organizations including the World Bank, the International Monetary Fund, the Canadian Tax
Foundation, the Canadian International Development Agency, the Forum of Federations,
the United Nations University, and governments in a number of countries.
Wolfgang Breuer is full professor of Finance at the RWTH Aachen University, Germany’s
leading Technical University. From October 1995 to February 2000 he was a full Professor
of Finance at the University of Bonn. He earned his Ph.D. degree in February 1993 and
his postdoctoral degree in July 1995, both at the University of Cologne. After his diploma
in 1989 he worked for one year in Frankfurt as a consultant at McKinsey & Co., Inc.,
before continuing his academic career. Wolfgang Breuer has written about a dozen books,
more than 30 articles in books, and numerous peer-reviewed journal articles comprising
a great variety of topics in the field of finance. His current research interests focus on
portfolio management, international financial management, and corporate finance.
Martin Brixner has been a research assistant at the Center for Entrepreneurial and Financial Studies (CEFS) at the Technische Universität München (TUM), Germany, since 2003.
Previously, he graduated at the European Business School – International University


List of Contributors

xxi

Schloß Reichartshausen (ebs), Oestrich-Winkel, Germany, in business administration. His
course of studies comprised semesters at the Sorbonne University, Paris, France, and the
San Francisco State University. He majored in finance and business information technology. His research at CEFS focuses on business venture financing, mezzanine financing,
and corporate pension schemes.
Hans Bruining is Associate Professor in the Department of Strategy and Business Environment at RSM Erasmus University Rotterdam, The Netherlands. He is senior lecturer in
Strategy, Entrepreneurship, and Management Control. His research interests include management buy-outs, strategic renewal, corporate entrepreneurship, corporate governance,
private equity, and venture capital. He undertook the first major study of management
buy-outs in The Netherlands and received his Ph.D. in 1992 from Erasmus University
Rotterdam.
Rachel A. Campbell completed her Ph.D. on Risk Management in International Financial
Markets at Erasmus University, Rotterdam in 2001. She currently works at the University
of Maastricht as an Assistant Professor of Finance. Her work has been published in a
number of leading journals, including the Journal of International Money and Finance,
Journal of Banking and Finance, Financial Analysts Journal, Journal of Portfolio Management, Journal of Risk, and Derivatives Weekly.
Stefano Caselli is associate professor in corporate finance at Bocconi University. He has
written many academic papers and books about corporate banking, financing of SMEs,
private equity and venture capital, and the new Basle Accord. He is co-editor with Stefano
Gatti of the book Venture Capital: A Euro-System Approach (Springer, 2003). He is also
academic director of Master in International Management CEMS at Bocconi University
and Director of the Executive Master in Banking and Finance at SDA Bocconi. He is a
member of the board of directors of Enter, the Research Center of Entrepreneurship of
Bocconi University.
Massimo G. Colombo is full Professor of Economics of Technical Change at the Department of Economics and Industrial Engineering of the Politecnico di Milano. His main
interests cover industrial economics, economics of innovation, and strategic management.
Annalisa Croce is a Ph.D. student in the Doctoral Program in Management, Economics
and Industrial Engineering at the Politecnico di Milano. Her scientific activity is mainly
in corporate finance. Her areas of research include venture capital and equity valuation.
Stefano Gatti is associate professor in corporate finance at Bocconi University. He has
written many academic papers and books about corporate finance, project finance, private
equity and venture capital, and company valuation. He is co-editor with Stefano Caselli of

the book Venture Capital: A Euro-System Approach (Springer, 2003). He is also academic
director of the degree in economic and finance at Bocconi University. He is a member of
the board of directors of DIR, the research division of SDA Bocconi, and he is a member
of the board of directors of the Ph.D. in Finance of Bocconi University.


xxii

List of Contributors

Michael Halperin is the Director of the Lippincott Library and the Safra Business Research
Center of the Wharton School, University of Pennsylvania. He is the author of two
books and numerous articles on business research techniques and related authorship on
empirical market studies. He is the principal designer of the ‘Business FAQ’, a knowledge
database of business research sources currently being shared by eleven major academic
business libraries in the U.S.
Arthur Herst is Professor of Finance at the Open University School of Management (OU).
He holds an MA in Business Economics from Erasmus University Rotterdam (EUR).
His Ph.D. thesis, titled Lease or Purchase, was published in the U.S. Since 1971 he has
had (part-time) functions at the EUR, the OU (doing research and developing material
for distance teaching in the fields of finance and investment) and Maastricht University
(doing research and responsible for investment and other courses). Since 2002 he has
concentrated on the OU, exploring the field of behavioral finance.
Teresa Hogan is a lecturer in Entrepreneurship at Dublin City University, and she recently
obtained her Ph.D. from University College Dublin. As well as venture capital, Teresa’s
research interests include the financing of high-technology enterprises, private capital,
high-technology entrepreneurship, academic spin-offs, the Irish software industry, and
enterprise education. Teresa has published in finance, entrepreneurship, and management
journals, including the Global Finance Journal, Venture Capital: An International Journal
of Entrepreneurial Finance, and the International Entrepreneurship and Management

Journal.
Georges Hübner (Ph.D., INSEAD) is the Deloitte Professor of Financial Management at
HEC Management School – University of Liège, and is Associate Professor of Finance
at Maastricht University. He is also a Research Director at the Luxemburg School of
Finance, University of Luxemburg, an Affiliate Professor at EDHEC (Lille/Nice), and an
Invited Professor at the Solvay Business School (Brussels). He has taught at the executive
and postgraduate levels in several countries in Europe, North America, Africa, and Asia.
Georges Hübner has published numerous research articles about credit risk, hedge funds,
and derivatives in leading scientific journals and books. He was the recipient of the
prestigious 2002 Iddo Sarnat Award for the best paper published in the Journal of Banking
and Finance in 2001. He is also the inventor of the Generalized Treynor Ratio, a simple
performance measure for managed portfolios.
Elaine Hutson holds a Ph.D. in finance from the University of Technology, Sydney, where
she worked as a lecturer in finance for 9 years. After submitting her thesis in 1999,
she moved to Dublin and is now a lecturer in the School of Banking and Finance at
University College Dublin. She has published over 20 articles in a wide variety of books
and journals including the Journal of Empirical Finance, the Journal of International
Financial Markets, Institutions and Money, the International Review of Financial Analysis
and the Journal of the Asia Pacific Economy. Elaine’s research interests include mergers
and acquisitions, the performance, regulation and history of managed funds, international
risk management, and asymmetry in financial returns.


List of Contributors

xxiii

Nancy Huyghebaert is Associate Professor of Finance at K.U. Leuven (Belgium), where
she obtained her Ph.D. in December 2000. Her work has been published in Strategic
Management Journal, Journal of Corporate Finance, European Financial Management,

Journal of Business Finance and Accounting, and Tijdschrift voor Economie en Management. Her current research interests are in corporate finance. She studies the financial
structure, the performance, and survival of entrepreneurial firms, with a special interest
in the interactions with product-market characteristics. She also examines initial public
offerings, privatizations, and mergers and acquisitions.
Anders Isaksson is a Lecturer at the Umeå School of Business and Economics in Umeå,
Sweden. His research mainly focuses on small business finance, with a special emphasis
on the venture capital process and the relationship between venture capital firms and
entrepreneurs. His professional experience includes working as a special advisor on venture capital issues for the Swedish Ministry of Industry, where he acted as a strategic
advisor to the minister, representing the government in professional councils and working
closely with central authorities. He has published several research papers, textbooks and
consultancy reports.
Dieter G. Kaiser is responsible for the institutional research of Benchmark Alternative
Strategies in Frankfurt, Germany (since March 2003). He started his professional career in
the structured products sector at Dresdner Kleinwort Wasserstein in Frankfurt, Germany.
Afterwards he joined Crédit Agricole Asset Management in Frankfurt where he was then
responsible for the fund-of-hedge-funds Marketing Support within the Institutional Sales
& Marketing division. Dieter G. Kaiser has written several articles on the subject of alternative Investments. He is the author of the German books Hedge Funds – Demystification
of an Investment Class – Structures, Opportunities, Risks (Gabler, 2004) and Alternative
Investment Strategies – Insights into the Investment Techniques of the Hedge Fund Managers (Wiley, 2005). He is also co-editor of the Handbook of Alternative Investments
(Gabler, 2006). Dieter G. Kaiser holds a Diploma in Technical Business Administration
from the University of Applied Sciences in Offenburg and a Master of Arts (M.A.) in
Banking and Finance from the HfB – Business School of Finance and Management in
Frankfurt.
Christoph Kaserer is full professor of financial management at the Munich University
of Technology (Technische Universität München, TUM), Germany, and co-director of
the Center for Entrepreneurial and Financial Studies (CEFS) at TUM. Since October
2005 he is also dean of TUM business school. He has published research in leading
international and German academic journals. Moreover, he is the editor of the Zeitschrift
für Bankrecht und Bankwirtschaft, a leading German academic journal in the field of
finance and law. An active advisor of large private companies and public institutions, he

worked as a consultant for the German and the Swiss governments as well as for the
European Venture Capital Association (EVCA). Before joining TUM business school, he
became full professor of financial management and accounting at Université de Fribourg,
Switzerland, in 1999. After graduating in economics at the University of Vienna, Austria,
he was appointed research assistant at the department of banking and finance at the
University of Würzburg, Germany, where he also earned his qualification as a university
lecturer (Habilitation) in 1998.


xxiv

List of Contributors

Andreas Kemmerer is the author of several research articles on the private equity industry.
He is currently working on his Ph.D. thesis at the Centre for Financial Studies, University
of Frankfurt under the supervision of Professor Wahrenburg. He holds a Master Diploma
in Finance from the University of Frankfurt and worked for Haarman & Hemmelrath
as an associate in corporate finance and audit. He also had internships at Dresdner and
Direct Funding Inc., a mortgage company based in Florida.
Philipp Krohmer completed his masters studies of business administration at the University
of Mannheim, Germany, Ècole de Management, Lyon, France and Universidad Autónoma
de Barcelona, Spain with a focus on finance and statistics. He is currently finishing his
Ph.D. thesis at the Johann Wolfgang Goethe University, Frankfurt/Main, Germany within
the research-project ‘Venture Capital and the New Markets in Europe’, in collaboration
with the Center for Financial Studies (CFS). His research and publishing activities focus
on performance determinants and investment patterns of closed-end private equity and
venture capital funds. He joined CEPRES in 2002 and is as senior consultant responsible
for the data center and the initiation and execution of consulting projects. Before joining
CEPRES, he worked at HeidelbergCement and Andersen Consulting S.A. (Barcelona).
Rainer Lauterbach is head of the Private Equity department of Harald Quandt Holding.

He joined Harald Quandt Holding in the year 2000 after graduation from the Wharton
MBA Program. His major in Entrepreneurial Management prepared him well to build
a portfolio of venture capital direct investments as CEO of QVentures, an affiliate of
Harald Quandt Holding. Parallel to running QVentures, he is responsible for private
equity and venture capital fund investments nationally and internationally for Harald
Quandt Holding. Before Wharton, he was employed by IBM from 1991 until 1997
in the areas of software and business development in Germany, the U.S. and the U.K.
Rainer Lauterbach is enrolled in the external Ph.D. program in Entrepreneurial Finance
at the Goethe University in Frankfurt, Germany, with the research focus on risk and
performance aspects of venture capital and private equity investments.
Edward J. Lusk is Professor of Accounting at the State University of New York, College
of Economics and Business, Plattsburgh, New York, and Emeritus at The Department
of Statistics, The Wharton School, The University of Pennsylvania, Philadelphia. As a
professor at the Otto-von-Guericke University, Magdeburg Germany, he taught the course
‘Venture Capital: The Creation of Tomorrow’ in the Master’s program for five years.
Tadeusz Lutoborski is a corporate finance advisor and specializes in private equity financing and M&A and is based in Frankfurt. He worked in the finance department for an
international consumer goods manufacturer, IT-consulting, and M&A-advisory. He holds
a Masters Diploma in Finance from the University of Frankfurt.
Sophie Manigart is full professor of finance and entrepreneurship at Ghent University,
Belgium and the Vlerick Leuven-Ghent Management School, and is guest professor at the
London Business School. Sophie did part of her doctoral studies at the Wharton School of
Business of the University of Pennsylvania and is specialized in the area of entrepreneurial
financing. Sophie has published several articles on entrepreneurship and venture capital
financing in various journals such as Journal of Business Venturing, Entrepreneurship,