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).
8% less likely to syndicate, LSVCCs are 90% less likely to syndicate, and foreign (U.
Table 4 regressions equations 4-6 consider the determinants of the propensity of LSVCCs to syndicate (regression equation 4), U.
Regression equations 4 and 5 in Table 4 do in fact indicate significant differences exhibited by LSVCCs and U.
Panel B of Table 5 distinguishes syndication among LSVCCs and foreign VCs only from the rest of the types of VCs.
Thereafter, the federal government adopted LSVCC legislation in 1987, British Columbia in 1989, Manitoba in 1991, Ontario, Saskatchewan, and Prince Edward Island in 1992, New Brunswick in 1993, and Nova Scotia in 1994.
Investors receive tax subsidies so long as the LSVCC follows the statutory covenants that govern the fund.
LSVCC constraints, in contrast, are invariant across funds and change over time only with statutory changes.
To provide some sense of the relative importance of LSVCC venture capital in Canada, Figures 1 through 4 present relevant data on such funds.
The average LSVCC ratio of management expenses to assets (MER) is more than 4 percent, which is substantially higher than that for all other types of mutual funds in either Canada or the United States (Cumming and Macintosh, forthcoming).
One possible explanation is that, with such massive portfolios, LSVCC fund managers have little or no time to get involved in the management of their investee companies.