By a News Reporter-Staff News Editor at Investment Weekly News -- Fresh data on Finance are presented in a new report. According to news reporting out of Nashville, Tennessee, by VerticalNews editors, the research stated, “This paper finds evidence that the market for follow-on capital discourages risk taking by venture capital fund managers. The amount of follow-on capital raised by venture capitalists is concave with respect to current fund performance.”
Our news journalists obtained a quote from the research from Vanderbilt University, “In addition, managers with less consistent performance are slower, and less likely, to raise a follow-on fund. Venture capitalists adjust their investment strategy to balance fundraising incentives against the incentive to pursue risk provided by carried interest.”
According to the news editors, the research concluded: “The findings are consistent with models of career concerns, where an agent’s compensation is designed to (partially) offset the implicit incentives created by future employment opportunities.”
For more information on this research see: Venture capital and career concerns. Journal of Corporate Finance , 2018;49():168-185. Journal of Corporate Finance can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Corporate Finance - http://www.journals.elsevier.com/journal-of-corporate-finance/)
Our news journalists report that additional information may be obtained by contacting N.G. Crain, Vanderbilt University, Owen Grad Sch Management, Nashville, TN 37203, United States.
The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.jcorpfin.2017.12.004. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.
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CITATION: (2018-05-05), New Finance Study Findings Have Been Reported by Investigators at Vanderbilt University (Venture capital and career concerns), Investment Weekly News, 518, ISSN: 1945-8185, BUTTER® ID: 015578495
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