Case

Management and Economics

315

AN OVERVIEW OF THE POSSIBLE STRATEGIES IN VENTURE CAPITAL INVESTMENTS IN POST-TURBULENCE PERIODS

Gabriela PRELIPCEAN Mircea BOSCOIANU University “Ştefan cel Mare” of Suceava Air Force Academy, Braşov

ABSTRACT

Invention and innovation could represent an important vector for sustaining the recovery after de crisis in emerging economies, but the actual status of these economies limits dramatically the liquidity and the governmental support for innovation. In this case, Venture Capital should play a new role in funding innovation and R&D. In emerging markets investors avoid long term investments and look for short term leverage and liquidity. Venture capitalist focus on high returns at acceptable risk and avoids early stages, because of uncertainty regarding the technology and later stages where returns are diminished. An analysis of the treatment of uncertainty on Venture Capital investments but also the consequences and implications of these results are presented.

Keywords: risk management strategies, venture capital (VC) investment 1. Introduction in Venture Capital investments The main problems associated to the development of innovative firms are related to the lack of finance, low human resource capabilities, and the transfer of technological capabilities. The conventional methods of financing could not respond to the risk profile of start-ups. In this case, innovative financing, equipped with specific technologies, high flexibility and capability of selection is welcome. Venture capital (VC) is an innovative long term investment focused on supporting unquoted high growth potential firms. The candidates for VC financing selection are characterized by high growth perspectives, high capital needs, proprietary IPR (intellectual property rights) and multiple innovative capabilities [1]. VCs are attracted by firms that offer a strong management, low technology risk, high market potential (market attractiveness, product...