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Do venture capitalists add value? A comparative study between Singapore and US

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  • Clement Wang
  • Kangmao Wang
  • Qing Lu

Abstract

This study provides a comprehensive overview of venture capital (VC) funds in Singapore. By examining the effects on their public listed investees, a profile of VC-backed listed companies in Singapore is analysed. It is found that value added of VCs to their investees can be attributed in several aspects: their equity stake taking, board seat, and especially in their timing of initial public offerings (IPOs) to market heights. The findings in the paper have several implications. Although the role of VC firms in Singapore is important in creating public companies, their participation with respect to their investees still lags behind their counterparts in the US. Their value added in management functions needs to be emphasized so that they can contribute more to the investees and thus, enhance their own returns. For companies seeking VC support or already preparing IPO with VC support, they should know what VCs can and cannot provide. For instance, they can expect the VCs to help in the timing of IPOs, but in management support, the help provided by the VCs in Singapore is limited compared to their US counterparts.

Suggested Citation

  • Clement Wang & Kangmao Wang & Qing Lu, 2002. "Do venture capitalists add value? A comparative study between Singapore and US," Applied Financial Economics, Taylor & Francis Journals, vol. 12(8), pages 581-588.
    • Handle: RePEc:taf:apfiec:v:12:y:2002:i:8:p:581-588
    DOI: 10.1080/09603100010011963
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    References listed on IDEAS

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    Cited by:

    1. Andrea Schertler, 2005. "European venture capital markets: fund providers and investment characteristics," Applied Financial Economics, Taylor & Francis Journals, vol. 15(6), pages 367-380.
    2. Beat Reber & Caroline Fong, 2006. "Explaining mispricing of initial public offerings in Singapore," Applied Financial Economics, Taylor & Francis Journals, vol. 16(18), pages 1339-1353.
    3. Michael Peneder, 2009. "The impact of venture capital on innovation behaviour and firm growth," Venture Capital, Taylor & Francis Journals, vol. 12(2), pages 83-107, November.
    4. Dafna Schwartz & Raphael Bar-El, 2006. "Venture Investments in Israel - A Regional Perspective Dafna Schwartz and Raphael Bar-El Ben-Gurion University, School of Management, Israel," ERSA conference papers ersa06p868, European Regional Science Association.
    5. Michael Peneder, 2006. "Venture Capital: Ergebnisse internationaler Wirkungsanalysen," WIFO Monatsberichte (monthly reports), WIFO, vol. 79(3), pages 161-172, March.

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