Venture Capital: A Closer Look Behind the Curtain

  • Darek Klonowski
Chapter

Abstract

Venture capital is defined as the provision of capital and know-how by institutional investors to private entrepreneurial firms. The mainstream media tends to describe venture capitalists as a “super-breed” of financial intermediaries. Evidence, however, points to the contrary, suggesting that the benefits of venture capital may rarely materialize. In other words, the venture capital “promise” of value creation, superior assistance to entrepreneurial firms, and meaningful above-average returns appears to be false. Evidence also confirms that venture capitalists “get it right” in achieving entrepreneurial success roughly one or two times in ten (other investee firms underperform or go bankrupt). The performance of venture capital may actually resemble an “n-arc” rather than a J-curve.

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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Darek Klonowski
    • 1
  1. 1.Brandon UniversityBrandonCanada

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