Financing practices in the German venture capital industry: An empirical assessment

Andreas Bascha and Uwe Walz ()

No 2002/08, CFS Working Paper Series from Center for Financial Studies (CFS)

Abstract: This paper investigates the financial contracting behavior of German venture capitalists against the results of recent theoretical work on the design of venture capital contracts, especially with regard to the use of convertible securities. First, we identify a special feature of the German market, namely that public-private partnership agencies require significantly lower returns than private and young venture capitalists. The latter are most likely to follow their North-American counterpart by refinancing themselves with closed-end funds. Second, with regard to financing practices it is shown that the use of convertibles, relative to other instruments, is influenced by the anticipated severity of agency problems.

Keywords: Venture Capital; Convertible Securities; Agency Theory (search for similar items in EconPapers)
JEL-codes: C24 G24 G32 (search for similar items in EconPapers)
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (51)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cfswop:200208

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