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The Exit Decision in the European Venture Capital Market

Elisabete Félix, Cesaltina Pires () and Mohamed Azzim Gulamhussenb ()
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Mohamed Azzim Gulamhussenb: Instituto Superior de Ciencias do Trabalho e da Empresa, Departamento de Financas e Contabilidade

CEFAGE-UE Working Papers from University of Evora, CEFAGE-UE (Portugal)

Abstract: This article analyzes the exit decision in the European venture capital market, studying when to exit and how it interacts with the exit form. The paper emphasizes the impact of asymmetric information on the divestment decision. Our model considers the impact of caracteristics of the venture capital investor, characteristics of the investment and contracting variables on the exit decision. Our results show that venture capitalists associated with .financial institutions have quicker exits, a result which is stronger for trade-sales exits. In addition, our results highlight the importance of the contracting variables on the exit decision. An unexpected but interesting result is that the presence in the board of directors leads to longer investment duration.

Keywords: Asymmetric information; venture capital; trade sales; IPO; write-offs; exit decision; competing risks model (search for similar items in EconPapers)
JEL-codes: C24 G24 G32 G38 K22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-eec and nep-ent
Date: 2008
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Journal Article: The exit decision in the European venture capital market (2014) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:cfe:wpcefa:2008_01

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