The exit decision in the European venture capital market
Gomes Santana Félix, Elisabete Pacheco Pires, Cesaltina Gulamhussen, Azzim
Gomes Santana Félix, Elisabete
Pacheco Pires, Cesaltina
Gulamhussen, Azzim
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Publication Type
Journal article
Editor
Supervisor
Publication Year
2014
Journal
Quantitative Finance
Book
Publication Volume
14
Publication Issue
6
Publication Begin page
1115
Publication End page
11130
Publication Number of pages
Collections
Abstract
This article analyses the exit decision in the European venture capital market, studying when to exit and how it interacts with the exit form. Using a competing risks model we study the impact on the exit decision of the characteristics of venture capital investors, of their investments and of contracting variables. Our results reveals that the hazard functions are non-monotonic for all exit forms and suggest that, in Europe, Initial Public Offering candidates take longer to be selected than trade sales. Moreover our results show that, in Europe, venture capitalists associated with financial institutions have quicker exits (stronger for trade sales), and highlight the importance of contracting variables on the exit decision. An unexpected result is that the presence on the board of directors leads to longer investment durations.
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Keywords
Accounting & Finance, Financial Services & Insurance