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Venture Capital and Private Equity Contracting, 2nd Edition
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Venture Capital and Private Equity Contracting, 2nd Edition

by Douglas J. Cumming, Sofia A. Johan
August 2013
Intermediate to advanced
780 pages
23h 24m
English
Elsevier
Content preview from Venture Capital and Private Equity Contracting, 2nd Edition
7

Style Drift

This chapter introduces the concept of style drift to private equity investment. We present theory and evidence pertaining to style drifts in terms of a fund manager’s stated focus on particular stages of entrepreneurial development. We present a model that derives conditions under which style drifts are less likely among younger fund managers, in order to signal ability and commitment to stated objectives for the purpose of raising follow-on funds. We also show ways in which changes in market conditions can affect style drifts and show differences for funds committed to early stage investments versus funds committed to late stage investments. The VentureXpert data examined provide strong support for our theoretical predictions as ...

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Publisher Resources

ISBN: 9780124095373