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(7) Probability (Security selected) = [alpha] + [[beta].sub.1] Startup + [[beta].sub.2] High-tech + [[beta].sub.3] Log (Deal size) + [[beta].sub.4] LSVCC + [[beta].sub.5] Capital gains tax + [[beta].sub.6] TSX + [[beta].sub.7] Trend + [[beta].sub.8] [[epsilon].sub.Startup] + [[beta].sub.9] [[epsilon].sub.High-tech] + [[beta].sub.10] [[epsilon].sub.Syndication] + [epsilon]
A possible exception is the case of LSVCCs (see Cumming, 2005a, for details); therefore, we include the LSVCC variable in the endogeneity tests.
Further to H2, note that in Canada there are a variety of different types of investors, including private independent limited partnerships, corporate VCs, government VC funds, labor-sponsored venture capital corporations (LSVCCs), institutional investors, as well as foreign (U.S.) funds.
LSVCCs (Table 1, panel E) are significantly different than the other Canadian VC funds.
The right-hand-side variables in equation * include a dummy variable for startup firms (a dummy for expansion-stage firms is suppressed for reasons of perfect collinearity; other later stage firms are excluded from the data herein), a dummy for high-tech firms, the capital required by the entrepreneurial firm (in real 2000 Canadian dollars and in logs), a dummy variable for LSVCCs, a variable for the capital gains tax changes, (7) a dummy variable for the Toronto TSX index, (8) and a trend term to account for changes over time.
Also, analogous to regression equation 3, Table 4 also presents regression equations 4-6 for syndications with LSVCCs only (regression equation 4 as specified in Table 4), foreign VCs only (regression equation 5 in Table 4), and for syndications for all other types of investors excluding foreign VCs and LSVCCs (regression equation 6 in Table 4).
LSVCCs are 19.2% less likely to invest in startup stage and 34.6% less likely to invest in high-tech firms relative to limited partnerships.
Relative to private independent limited partnerships, corporate VCs are 12.% more likely to syndicate, government VCs are 12% more likely to syndicate, institutional VCs are 12.8% less likely to syndicate, LSVCCs are 90% less likely to syndicate, and foreign (U.S.) investors are 12.2% more likely to syndicate.
Table 4 regressions equations 4-6 consider the determinants of the propensity of LSVCCs to syndicate (regression equation 4), U.S.
Regression equations 4 and 5 in Table 4 do in fact indicate significant differences exhibited by LSVCCs and U.S.
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