Construction and description of the data set and variables

Abstract

A major problem with venture capital research is the difficulty of gaining access to quality data - giving full literal meaning to the term „private” equity (Schmidt 2004; Weidig/Mathonet 2004; Lossen 2007): since transactions are usually performed by private organizations, no information is directly available to the public. Fortunately, a few venture capital databases exist and are one option to overcome this difficulty. However, these databases only cover some aspects of the venture capital cycle and may not fit all VC research topics, so that some researchers prefer relying on proprietary data sets. Since choosing the right data source is critical but not straightforward, this chapter starts by comparing the principal data sources before it goes on to discuss the choices made for this study and describe the corresponding data. The next section introduces the necessary additional variables, followed by a brief analysis of the VC industry’s industry geography. Finally, the last section summarizes the chapter and synthesizes the advantages and drawbacks of the data set.