scholarly journals VENTURE CAPITAL AND PRIVATE EQUITY INVESTMENT IN THE CZECH REPUBLIC

Business & IT ◽  
2017 ◽  
Vol VII (2) ◽  
pp. 2-9
Author(s):  
Božena Kadeřábková ◽  
Petr Ptáček
Keyword(s):  
Czech Republic ◽  
Venture Capital ◽  
Private Equity ◽  
The Czech Republic ◽  
Equity Investment

scholarly journals Private equity and venture capital financing in the Czech Republic and other european countries – development, opportunities and limitations

2011 ◽  
Vol 59 (7) ◽  
pp. 307-316
Author(s):  
Jaroslava Rajchlová ◽  
Zdeněk Brož ◽  
Michaela Baranyková ◽  
Michal Polák
Keyword(s):  
Czech Republic ◽  
Venture Capital ◽  
Private Equity ◽  
Positive Impact ◽  
Time Frame ◽  
European Countries ◽  
The Czech Republic ◽  
Business Plans ◽  
Low Level ◽  
Capital Financing

Financing by means of private equity and venture capital (PE/VC) offers businesses the resources required to finance their future growth and bring prospective business plans and innovative ideas to reality. This form of financing is relatively new and even though it offers clear advantages it is not frequently used in the Czech Republic and other European countries in the CEE region. This paper addresses current and very relevant issues related to this form of financing. The purpose of this research is to identify opportunities and limitations for this type of financing based on benchmarking analysis. This analysis observes the development of PE/VC financing in the Czech Republic and compares it with several other countries in the CEE region. This paper discusses several factors that influence the development of PE/VC financing. Several conclusions can be drawn from this research. The Czech Republic is in 10th place in the utilization of venture capital from the selected 22 countries covered in this research. The time frame for this research is between 2004 and 2010. After thorough analysis of development and conditions in other countries a list of recommended changes that have proven positive impact on the whole economy is formulated. The relatively low level of utilization of the venture capital in the Czech Republic may be due to several things for example by a lack of knowledge of this form of financing and the inability of the management to formulate a business plan that is interesting for the PE/VC investor. The managers are often afraid of the administrative complexity and also the investor expects relatively high profitability of the investment. Another possible limitation is that the public issuing of stocks is used rarely in the Czech Republic. Another cause for the low level of utilization is the absence of public and institutional support for this form of financing. Venture capital has clear and measurable positive impacts on the whole economy and it is therefore important to support and research the use of this method of financing.

scholarly journals Private equity and venture capitalists' investment criteria in the Czech Republic

2010 ◽  
Vol 58 (6) ◽  
pp. 641-652 ◽  
Author(s):  
Marek Zinecker ◽  
Jaroslava Rajchlová
Keyword(s):  
Czech Republic ◽  
Venture Capital ◽  
Financial Management ◽  
Private Equity ◽  
Investment Decision ◽  
Practical Experience ◽  
Average Weight ◽  
The Czech Republic ◽  
Capital Financing

For investment decision making to be rational, the existence of investment criteria is required. In the theory of financial management, the effectiveness of investment is traditionally judged by the degree to which an investment proposal contributes to achieving the main financial goal of business, i.e. market value maximization of the firm.So far, potential businesses for Private Equity and Venture Capital financing in the Czech Republic have not had information regarding investment criteria and their significance, when considered by investors, at their disposal, which is due to absence of relevant research results.This article presents results of the research project whose aim is to establish which criteria are considered to perform an essential role in the selection of business proposals by firms investing Private Equity and Venture Capital in the Czech Republic as well as the most common reasons for rejecting the proposals. Based on practical experience of financing by Private Equity and Venture Capital, the research made it possible to identify the most significant criteria, namely characterization of mana­gement, market, product and the rate of investment capital appreciation. The results of the research are consequently compared with findings which were published in similar studies undertaken in the past (e.g. Tyebjee, Bruno, 1984; Fried, Hisrich, 1994; MacMillan et al., 1985, 1987; Muzyka et al., 1996; Eisele, 2002).The research supports the thesis that, when considering business proposals, above-average weight is attached to criteria concerning the characterization of management, i.e. experience and competencies in all stages of business life cycle. Nevertheless, the fulfilment of the criteria is not sufficient for investors to evaluate a business proposal positively. They also place an emphasis on selected criteria related to market and product. By publishing empirical data, an important signal regarding up-to-date evaluative criteria and their weight is sent to those interested in financing by means of Private Equity/Venture Capital as well as investors in Private Equity and Venture Capital funds and to investment companies.

scholarly journals Private equity and venture capital: investment fund structures in the Czech Republic

2011 ◽  
Vol 59 (7) ◽  
pp. 541-552 ◽  
Author(s):  
Marek Zinecker
Keyword(s):  
Czech Republic ◽  
Venture Capital ◽  
Capital Investment ◽  
Private Equity ◽  
Negative Impact ◽  
Business Environment ◽  
Investment Fund ◽  
Correct Operation ◽  
The Czech Republic ◽  
Legal Barriers

A working private equity and venture capital market (PE/VC market) stimulates the business environment in a positive manner and impacts the level of economic growth of national economies. A study of the Austrian Private Equity and Venture Capital Organisation/AVCO (2004, p. 6) defines prerequisites for a correct operation of the PE/VC market. It views the legislative provision for suitable legal fund structures for PE/VC investments and their tax treatment as a key factor. In its publication, Private Equity & Venture Capital in the Czech Republic (2010, p. 14), the Czech Venture Capital Association/CVCA stresses that legal barriers are an important reason behind the limited scope of resources available to domestic PE/VC funds. Legal barriers prevent the establishment of a standard PE/VC fund in the territory of the Czech Republic, which fact in turn has a negative impact on the level of development of the domestic PE/VC market (fundraising, investment volumes, establishment of the infrastructure required for the operation of PE/VC funds). The purpose of this article is, based on an analysis of the relevant information sources, to assess how the current Czech legislation regulates the legal fund structures for PE/VC investments and their tax treatment. Proposals for a potential improvement of the situation are based on a comparison of the legislative framework applicable in the Czech Republic and the requirements defined by the European Venture Capital Association/EVCA, as well as the AVCO study (2004, 2006).

scholarly journals Proposing changes in legislative and institutional conditions for private equity and venture capital financing in the Czech Republic – a comparative study with Poland

2011 ◽  
Vol 59 (7) ◽  
pp. 317-324 ◽  
Author(s):  
Jaroslava Rajchlová ◽  
Michaela Baranyková ◽  
Michal Polák ◽  
Zdeněk Brož
Keyword(s):  
Czech Republic ◽  
Venture Capital ◽  
Comparative Study ◽  
Small Businesses ◽  
Private Equity ◽  
Positive Influence ◽  
The Czech Republic ◽  
New Business ◽  
Capital Financing ◽  
The Government

This paper discusses the conditions of private equity and venture capital financing in the Czech Republic and Poland. Especially the related legislation, taxes and support of this type of financing are discussed in detail. The purpose of this research is to evaluate the conditions, to find factors that have positive influence and to formulate recommendations that would improve the conditions for both PE/VC investors and firms with new business ideas. Improving the conditions for PE/VC financing helps small businesses get the needed capital that cannot be obtained from banks and other institutions. This form of financing has a proven positive effect on whole economy. Identifying and removing obstacles is therefore important and helps the government to promote economic growth. This form of financing is used frequently in other European countries. In the central and eastern Europe it is not used as frequently but the situation is improving according to (Zinecker & Rajchlová, 2010). According to the study made by EVCA an array of legislative shortcoming were identified in the Czech Republic. Poland and Hungary have better conditions for PE/VC financing. According to EVCA studies made in 2004 and 2006 Poland shows that the conditions improve each year. Therefore Poland was chosen in this research for a comparative study with the Czech Republic.

Structuring and financing private equity and venture capital transactions in Luxembourg

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bertrand Géradin
Keyword(s):  
Venture Capital ◽  
Design Methodology ◽  
Private Equity ◽  
Corporate Law ◽  
Efficient Manner ◽  
Equity Investment ◽  
Content Type ◽  
Key Issues ◽  
Practical Implications ◽  
Optimum Balance

Purpose Luxembourg is the jurisdiction of choice for many private equity and venture capital investors/funds. Though the optimum balance of financing instruments in relation to any structure varies according to its particular circumstances, one factor that all Luxembourg domiciled FDI structures have in common is the requirement for an appropriate level of equity investment. This article intends to summarize some of the topics frequently encountered in relation to equity structuring choices. Design/methodology/approach Author details the different steps and choices available to investors and funds. The article offers answers to questions to provide a broad, yet detailed, overview of the process and journey; from selecting the vehicle right through to distributing to investors, governance, and compliance. Findings To avoid an expensive mistake, it is paramount that the private equity or venture capital investors and management team receive detailed advice to ensure: (i) the deal is structured in the most tax efficient manner possible and the commercial deal is suitable for all parties, and (ii) the deal is structured in a manner which is effective under Luxembourg law, for both tax and legal purposes. Practical implications It is important that non-Luxembourg lawyers are able to identify key issues when negotiating the terms of the investment documents, in particular, the articles of association and shareholders' agreement. Originality/value Practical guidance from Luxembourg lawyer specializing in corporate law, mergers and acquisitions, venture capital and private equity transactions.

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