Investment Patterns and Performance of Organizations Involved in the VC Market Evidence from the Israeli Venture Capital Market

תקציר

This research is an exploratory study that analyzes various VC agents. It presents characteristics, investment patterns and performances of such agents in the Israeli VC market. Ten categories of investors were identified in the Israeli VC market, which are: domestic and Foreign VCs and CVCs, Investment Companies, Business Angels, Technological Incubators, Technology Transfer Offices, and R&D grants for startups. The theoretical part of the paper presents a review of the different types of VC agents in a comparative perspective. The picture it presents is of a diversified market with heterogonous agents. This picture is supported be the empirical part of the paper, which presents the investment patterns, risk profiles and success rates of those different types of VC agents. The empirical work of this paper is based on a population of 2,371 Israeli high tech firms, which were created during the years 1991-2000. The main findings are that foreign VC agents have superior performances to similar domestic VC agents, CVC has superior performances to LP VC funds, business angels has similar success rate as LP VC funds while significantly lower failure rate and that technological incubators have significantly inferior performances to all other VC agents.