Liquidity, technological opportunities, and the stage distribution of venture capital investments

Lahr, Henry and Mina, Andrea (2014). Liquidity, technological opportunities, and the stage distribution of venture capital investments. Financial Management, 43(2) pp. 291–325.

DOI: https://doi.org/10.1111/fima.12048

Abstract

This paper explores the determinants of the stage distribution of European venture capital investments from 1990 to 2011. Consistent with liquidity risk theory, we find that the likelihood of investing in earlier stages increases relative to all private equity investments during liquidity crisis years. While liquidity is the main driver of acquisition investments and, to some extent, of expansion financings, technological opportunities are overall the main driver of early and late stage venture capital investments. In contrast to the dotcom crash, the recent financial crisis negatively affected the relative likelihood of expansion investments, but not of early and late stage investments.

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About

• Item ORO ID
• 39907
• Item Type
• Journal Item
• ISSN
• 1755-053X
• Project Funding Details

• Funded Project Name	Project ID	Funding Body
  Seventh Framework Programme ((FP7/2007-2013)	Grant agreement no. 217466	EU
  Not Set	Not Set	BIS
  Not Set	Not Set	ESRC (Economic and Social Research Council)
  Not Set	Not Set	NESTA
  Not Set	Not Set	UK Innovation Research Centre

• Academic Unit or School
• Faculty of Business and Law (FBL) > Business > Department for Accounting and Finance
  Faculty of Business and Law (FBL) > Business
  Faculty of Business and Law (FBL)
• Copyright Holders
• © 2014 Financial Management Association International.
• Depositing User
• Henry Lahr