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13 Cards in this Set
- Front
- Back
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Explanations as to why VC more popular in US and UK than Asia and Europe
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(1) Exits (IPO markets)
(2) Entrepreneurial Ecosystem (3) Law and Corporate Governance (4) Country Risk (5) Cultural Differences |
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Most profitable exits in VC industry
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IPOs (sales to larger companies is not as profitable as IPOs)
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Entrepreneurial Ecosystem
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A regional community of entrepreneurs, venture capitalists, technologists, and service providers
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Self Dealing Behavior
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Those who control a corporation, whether they are managers, controlling shareholders, or both, can use their power to divert corporate wealth to themselves without sharing it with other investors
Also known as tunneling or expropriation |
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Country Risks
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Concerns about national level political and economic risk: corporate asset seizures, social upheaval, legal systems and protections
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Sovereign Spread
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Usually defined as the difference in yield between dollar denominated government debt and US government debt of the same duration; used to track the risk of government default; can only track the country risk that is correlated with government default; it is the additional amount that must be paid to compensate for greater risk
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Integrated Markets
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When all investors can make investments in any country
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Segmented Markets
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When investors in one country are unable to make investments in another country
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Global CAPM
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Considers a portfolio of global stocks in the CAPM model as opposed to the domestic model which considers all US stocks
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Domestic Beta
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The regression coefficient on an asset's excess returns when it is regressed on the market premium of its own country
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Country Beta
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The factor loading of a country on the global market premium
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Extensions of the Global CAPM
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(1) Style Adjustments
(2) Currency Risk (3) Country Risk (4) Segmented Markets |
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Pastor-Stambaugh Model
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A CAPM extension that adds liquidity to the multifactor factor model of Fama & French
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