Start-up Investment With Scarce Venture Capital Support

Vesa Kanniainen and Christian Keuschnigg

University of Helsinki, Department of Economics from Department of Economics

Abstract: Start-up entrepreneurs are often commercially inexperienced. In giving managerial advice, venture capitalists can importantly enhance the success of innovative but highly risky ventures. The supply of experienced venture capitalists is not eas-ily increased, however, when the rate of business formation accelerates. As the entrepreneurial sector expands, the incumbent venture capitalists tend to include more firms in their portfolio which dilutes the quality of advice, making project risks excessively high in the short-run.

Keywords: CAPITAL; RISK; CAPITALISM (search for similar items in EconPapers)
JEL-codes: D82 G24 G32 L19 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2001
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Start-up investment with scarce venture capital support (2004)
Working Paper: Start-Up Investment With Scarce Venture Capital Support (2002)
Working Paper: Start-Up Investment with Scarce Venture Capital Support (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:helsec:503

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