What factors determine the use of venture capital? Evidence from the Irish software sector

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Title: What factors determine the use of venture capital? Evidence from the Irish software sector
Authors: Hogan, Teresa
Hutson, Elaine
Permanent link: http://hdl.handle.net/10197/1141
Date: 2004
Abstract: We address the venture capital financing issue from the firm’s perspective. Using survey data for 110 new technology-based firms (NTBFs) in the Irish software sector, we assess the extent to which 5 human capital and 3 other variables determine the firm’s use of venture capital. Education of the lead founder to degree level is the only significant human capital variable, and it is directly related to the likelihood of being venture capital-backed. Venture capital-backed firms have significantly higher start-up costs, and their founders are less averse to loss of control than non-venture capital-backed firms. We conclude that the use of venture capital is dictated largely by the willingness of founders to relinquish control.
Type of material: Working Paper
Publisher: University College Dublin. School of Business. Centre for Financial Markets
Copyright (published version): Centre for Financial Markets, 2004
Subject LCSH: Venture capital
Computer software industry--Ireland
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Centre for Financial Markets Working Papers

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