The Characteristics and Value-Added Contributions of Private Investors to Entrepreneurial Software Ventures

John Freear and Jeffrey Sohl
Additional contact information
John Freear: Center for Venture Research, U NH
Jeffrey Sohl: Center for Venture Research, U NH

Journal of Entrepreneurial Finance, 2001, vol. 6, issue 1, 84-103

Abstract: The nature and role of early stage equity financing in the development of emerging entrepreneurial ventures in the software industry is examined. To provide an understanding of the relationship between the suppliers of capital and the ventures they bankroll, issues concerning equity positions and holding periods are addressed. Given the unique position of private investors in the early stage equity market, particular attention is given to the characteristics of these investors and the investor characteristics germane to the software industry. Results for the software sector are compared with technology-based companies in an attempt to uncover any discernable differences between the two groups. The research hypothesizes that there are differences in the informal venture capital market among broadly defined sectors in terms of the sectors' technology and competitive conditions and their impact on: first, the need for, and timing of, external equity capital; and secondly, the characteristics and value-added contributions of the private investors attracted to the sector.

Keywords: Investment Banking; Capital; Entrepreneurial; Financing; Software; Internet Services; New Firms; Startups; Financing Policy; Financial Risk; Risk Management; Capital Structure; Valuation (search for similar items in EconPapers)
JEL-codes: G24 L86 M13 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://jefsite.org/RePEc/pep/journl/jef-2001-06-1-f-freear.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pep:journl:v:6:y:2001:i:1:p:84-103

Access Statistics for this article

More articles in Journal of Entrepreneurial Finance from Pepperdine University, Graziadio School of Business and Management Contact information at EDIRC.
Bibliographic data for series maintained by Craig Everett ().