The Staged Financing Selection Mechanism for Government to Maximize the Green Benefits of Start-Ups

In this study, we investigate the most common forms of government grant in green start-ups, which are appropriation, interest-free bank loans, and tax subsidies. These mechanisms are used to mitigate the problem of higher research costs and sunk costs of start-ups on green innovation and help venture investors better monitor the business plan, asset use, and agency cost and regularly collect information of start-ups to retain the right to terminate financing projects and improve the efficiency of them. The aim of this work is to develop a theoretical model of the agency among the government, the venture capitalists who only pursue monetary income, the strategy investors who pursue strategic objectives and monetary income, and the entrepreneur who takes into account both the influence of different forms of government grant on entrepreneur financing at a different stage and the improved monitoring process of venture investors owe to the staged capital infusion of government. The model shows that the optimal staged financing decision is given when the first target of the government is to achieve social welfare optimization and the secondary goal of maximizing green benefits. Moreover, the model explains the optimal staged financing decision of venture investors and equity stake share in different rounds. Ultimately, we find the optimal staged financing portfolios for green start-ups to acquire venture investment, reduce the staged financing uncertainty, and help the government realize a national green innovation strategy.

Challenges and opportunities for creative-innovative clusters partnerships

Clusters of innovation are global economic “hot spots” where new technologies germinate at an astounding rate and where pools of capital, expertise, and talent foster the development of new industries and new ways of doing business. They are vibrant, effervescent ecosystems composed of startups, businesses that support the startup process, and mature enterprises (many of whom evolved rapidly from a startup history). In these ecosystems, resources of people, capital, and know-how are fluidly mobile and the pace of transactions is driven by a relentless pursuit of opportunity, staged financing, and short business model cycles. The aim of this paper, clustering, which is an important model in the development of the countries and the concept of innovation have been reviewed together. The most prominent feature of the industry is to produce Technology. Countries to focus on knowledge-intensive industries and businesses as a result of regional cluster policies for innovation are seen that there is a relation between. Clustering is an important model for an innovational development in Romania. The analysis was carried out for a period of 3 years, for which there were registered the main achievements in the field of product innovation, processes, organizational forms and marketing methods, new or significantly improved, obtained by companies, starting from January 2016 until December 2018, representing Romania’s contribution to the evaluation of the results of the European statistical research on innovation, 2018. Following the innovative activities in which the companies are engaged does the characterization of the innovation. The National Institute of Statistics provides the necessary means for carrying out statistical research on innovation in businesses in the business and industrial environment.

An analysis of timing decision in venture capital staged financing: evidence from India

Purpose Staged financing is a prominent feature of the venture capital investment process. With staged financing, venture capitalists (VCs) may choose to either make an investment or delay it at each round. The purpose of this paper is to investigate the influence of market uncertainty, project-specific uncertainty and agency problems on these decisions. Design/methodology/approach The study uses data from Indian firms that received venture capital funding between 2000 and 2017. The duration between funding rounds is analysed using survival analysis. An accelerated failure time model is used to estimate the influence of market uncertainty, project-specific uncertainty and agency problems on the length of time between funding rounds. Findings VCs delay investment when there are high levels of uncertainty in the market; if market uncertainty increases by 1%, delay in funding increases by more than 6% (almost a month) on average. There is no statistically significant relationship found between the funding duration and project-specific uncertainty. Agency problems motivate VCs to invest sooner. An increase in agency problems results in a reduction of 55% (almost five months) in the length of time before the next funding round. Practical implications This study has useful business policy implications. It provides VCs with real option value drivers such as market uncertainty, agency problems, which influence the timing of decisions in staged investment processes. It will help to make the choice between investing and delaying at each round of financing more robust. Further, it is useful for VCs to differentiate between market uncertainty and agency problems against the backdrop of their different implications for staging decisions. Originality/value Few studies have examined staging decisions from a real options perspective in the context of a developed economy and very few from a developing economy perspective. This study increases understanding of staging decisions in the Indian context.

A technology portfolio optimization model considering staged financing and moratorium period under uncertainty

Technology commercialization needs a large amount of financial resources and governments in developed and developing countries play a critical role in resource allocation to the technology commercialization, especially through “Technology Development Funds (TDFs)”. But, because of resource limitations, determining high priority technologies with higher impact on the country’s innovative performance and the optimal resource allocation to technology development is very important for science and technology policymakers. “Technology portfolio planning” has been developed and applied in this regard. Accordingly, a two-phase decision-making framework has been proposed. At the first phase, the priorities of technology fields are determined by using the best-worst method (BWM) and at the second phase, a two-stage stochastic technology portfolio planning model is developed by considering technological projects' risks and export market, as one of the important factor in the “Global Innovation Index” (GII) ranking. It also has been considered technology fields’ priorities, staged-financing, moratorium period, reinvestment strategy, and technology readiness levels (TRL) in allocating financial resources to technological projects. The main advantages of our proposed model are considering uncertainty and early signaling about underperforming technological projects. Due to the uncertain nature of the problem, our solution methodology is based on the Sample Average Approximation (SAA). In order to demonstrate the applicability of this model, a real case study and its computational results are presented.

Waran pada Initial Public Offerings di Pasar Modal Indonesia

Penelitian ini bertujuan untuk mengetahui apakah penerbitan waran pada Penawaran Umum Saham (Initial Public Offerings) di Pasar Modal Indonesia dilakukan sebagai bentuk mekanisme pendanaan bertahap (staged financing) (Schultz, 1993) ataukah merupakan upaya penyampaian sinyal tentang perusahaan (Chemmanur dan Fulghieri, 1997). Penelitian dilakukan pada 96 perusahaan yang melakukan IPO pada periode 2010-2013 di Bursa Efek Indonesia. Hasil penelitian menunjukkan bahwa IPO dengan waran dilakukan oleh perusahaan yang lebih muda, memiliki profitabilitas yang lebih rendah, serta dengan kecenderungan pemilik (owner) mempertahankan proporsi kepemilikan yang lebih rendah pasca IPO. Hasil analisis OLS menunjukkan initial return IPO dengan waran yang lebih tinggi dibanding IPO biasa. Analisis probit menunjukkan bahwa keputusan melakukan IPO dengan waran dipengaruhi oleh umur dan leverage. Hasil penelitian secara umum mendukung teori staged financing.

A Study of a Venture Company’s Control Rights Allocation Model

This paper proposes an allocation model of control rights between entrepreneurs and investors to properly manage venture companies. The basic concept of this model involves reflecting the company’s future market value in its control rights to entrepreneurs as an incentive, while securing investors’ minimum monetary requirements. Previous studies reveal that entrepreneurs’ control rights gradually dilute as the monetary requirement increases in multi-staged financing; therefore, it is necessary to establish a fundamental rule for control rights allocations in initial contracts. This model also has the capability to allocate cash flow rights, and the potential capability to justify its premium.