Do venture capitalists add value? A comparative study between Singapore and US
Titel:
Do venture capitalists add value? A comparative study between Singapore and US
Auteur:
Wang, Clement K. Wang, Kangmao Lu, Qing
Verschenen in:
Applied financial economics
Paginering:
Jaargang 12 (2002) nr. 8 pagina's 581-588
Jaar:
2002-08-01
Inhoud:
This study provides a comprehensive overview of venture capital (VC) funds in Singapore. By examining the effects on their public listed investees, a profile of VC-backed listed companies in Singapore is analysed. It is found that value added of VCs to their investees can be attributed in several aspects: their equity stake taking, board seat, and especially in their timing of initial public offerings (IPOs) to market heights. The findings in the paper have several implications. Although the role of VC firms in Singapore is important in creating public companies, their participation with respect to their investees still lags behind their counterparts in the US. Their value added in management functions needs to be emphasized so that they can contribute more to the investees and thus, enhance their own returns. For companies seeking VC support or already preparing IPO with VC support, they should know what VCs can and cannot provide. For instance, they can expect the VCs to help in the timing of IPOs, but in management support, the help provided by the VCs in Singapore is limited compared to their US counterparts.