The Genesis of Venture Capital - Lessons from the German Experience

Ralf Becker and Thomas Hellmann ()

No CESifo Working Paper No. 883, CESifo Working Paper Series from CESifo Group Munich

Abstract: Why does venture capital work in some countries but not in others? This clinical study of the first German venture capital firm examines the difficulties of creating a venture capital market in a bank-based financial system. The analysis identifies the problem of creating appropriate governance structures to protect investor returns. It exposes the difficulties of established banks - not to mention government - to devise venture investment strategies. It identifies the availability of high quality entrepreneurs as a critical complement. And it provides a reinterpretation of the hypothesis of Black and Gilson (1997), arguing that the existence of an active stock market is a necessary, but by no means sufficient condition for the development of venture capital.

JEL-codes: G20 G30 M13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-his and nep-ino
Date: 2003
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Working Paper: The Genesis of Venture Capital: Lessons from the German Experience (2000)
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