The Capital Flow from Institutional Investors to Entrepreneurs

Alexander Groh

in The Oxford Handbook of Venture Capital

Published in print April 2012 | ISBN: 9780195391596
Published online September 2012 | | DOI:

Series: Oxford Handbooks

The Capital Flow from Institutional Investors to Entrepreneurs


This article deals with the two-stage capital allocation process. It first describes current knowledge from research about institutional investors' criteria when they search promising countries. Next it documents research results on their selection of particular venture capital funds. This is followed by the discussion of the second step of the capital flow, from the venture capital funds to the entrepreneurs. It discusses the literature on venture capitalists' sorting criteria for entrepreneurial ventures and provides concluding remarks.

Keywords: capital allocation; institutional capital; venture capital funds; institutional investors; capital flow

Article.  8798 words. 

Subjects: Economics ; Financial Markets

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